Our Risk Management Philosophy is founded on the relentless pursuit of risk minimisation in view of preserving our clients’ capital and widening their risk adjusted returns spread.

Our Risk Management framework guides our risk management practices on a daily basis and so is fully integrated in our investment process. We consistently identify and manage risks within our clients’ risk tolerance attributes. Every investment decision is taken with risk mitigation in mind. We believe that mastering risk minimisation forms an integral part of our ability to deliver industry leading risk adjusted returns for our clients.

Given the variety and breadth of risks inherent in capital markets, oversimplifying risk to support measurement may be perilous. While managing investment portfolios, not only does Anneau have to account for the intended risks, but also concealed risks which can have a significant impact on returns. This in turn makes risk management the very foundation of a well-run investment process and not just a component of the investment strategy.

During the investment strategy formulation, a greater focus on expected returns and lesser on risk may result in a mismatch between the investment objective and risk appetite.

Anneau takes on risk to deliver returns; the objective of investment risk management is not to restrict the Investment managers’ discretion, but rather to assure clients that their assets are being managed according to the stated investment strategy. The latter should be consistent with the portfolios’ Investment objectives (as defined by the investment mandates, investment management agreements and Investment policy statements) and according to professional standards of monitoring, control and accountability.

ANNEAU’S RISK MANAGEMENT FRAMEWORK

Anneau’s risk management framework is segregated into 2 distinct frameworks:

1. Enterprise Risk Management Framework (“ERMF”)
2. Investment Risk Management Framework (“IRMF”)

Risk management is the process of identifying, assessing and monitoring both enterprise and Investment risks in order to minimise unanticipated losses, uncompensated risks and optimise the risk/reward ratio. At Anneau, we believe that a robust risk management system encompasses the scope of risks to be managed; the processes/systems and procedures to manage risk along with the roles and responsibilities of individuals involved in the risk management function.

Anneau’s Risk Management framework is comprehensive enough to capture all risks that both Anneau and its clients are exposed to. It has the flexibility to also accommodate changes in business activities.

Effective risk management is a key element of good governance and will provide reasonable, but not absolute assurance that:

1. Significant risks are identified and monitored, enabling management to make informed decisions and take timely action;
2. Opportunities are maximised with confidence that risks will be managed; and
3. Objectives, whether they are strategic to the firm and/or investment objectives of our clients, are achieved.

These Frameworks are updated by the company when needed and such updates are shared with the Board and its Committees on a regular basis.

The Risk Management Framework of the organisation comprise the following components:

1. Governance and organisation of Risk Management
2. Identification of risks;
3. Measurement and management of risks;
4. Reporting of risks and related information

Investors can access a copy of Anneau’s Risk Management Manual and the Risk Management Policy can be requested from the firm and/or consulted at the company’s offices.