Risk Management & Responsibility

Our Risk Management Philosophy

At Retro Fund Management AG, risk management is not a standalone function but a core component of responsible investment management and long-term capital stewardship.

We recognise that risk is inherent in all investment activity. Our role is to identify, assess, monitor, and manage risk in a structured and disciplined manner, ensuring that each portfolio remains aligned with its defined objectives, constraints, and risk parameters at all times.

Our approach to risk management reflects Swiss principles of prudence, accountability, and long-term responsibility.

Risk Embedded Throughout the Investment Process

Risk considerations are integrated into every stage of our investment process, from the initial mandate definition through to portfolio construction, ongoing monitoring, and review.

Risk management begins with:

A clear understanding of the client’s objectives and priorities
Definition of acceptable risk levels and volatility
Agreement on investment constraints, liquidity needs, and time horizons

This ensures that risk expectations are clearly defined and understood from the outset.

Mandate-Level Risk Definition

Each mandate is governed by a clearly articulated framework that defines the acceptable risk profile.

This typically includes:

Target risk levels and volatility expectations
Asset allocation ranges and exposure limits
Liquidity requirements and investment horizon
Restrictions or exclusions specific to the client

By establishing these parameters at mandate level, we ensure that all investment decisions are made within a transparent and agreed structure.

Portfolio Construction & Risk Diversification

Portfolio construction is guided by disciplined diversification principles designed to manage risk across different dimensions.

Key considerations include:

Diversification across asset classes, geographies, and strategies
Avoidance of excessive concentration in individual positions
Risk-adjusted allocation rather than return-driven positioning
Consideration of correlations and interaction between investments

Diversification is used as a primary tool to reduce portfolio vulnerability to individual risks and market events.

Ongoing Risk Monitoring & Oversight

Portfolios are monitored on an ongoing basis to ensure continued compliance with mandate parameters and risk guidelines.

Our oversight includes:

Regular assessment of portfolio-level risk exposures
Monitoring of concentration, liquidity, and market risks
Review of changes in macroeconomic and market conditions
Identification of emerging risks that may affect portfolio stability

Where risk levels move outside acceptable ranges, corrective action is considered and implemented in a measured and disciplined manner.

Market, Liquidity & Concentration Risk

We pay particular attention to key risk categories that can materially impact portfolio outcomes.

These include:

Market risk, arising from changes in market conditions and asset valuations
Liquidity risk, ensuring portfolios can meet obligations without undue disruption
Concentration risk, avoiding overexposure to individual investments, sectors, or counterparties

Risk assessments are conducted at both individual investment and aggregate portfolio level.

Ongoing Review & Compliance

Governance and regulatory requirements evolve over time. We therefore review our internal framework on an ongoing basis to ensure continued alignment with regulatory expectations and industry best practice.

Where appropriate, processes and controls are enhanced to reflect changes in the regulatory or market environment.

Operational & Governance Risk

In addition to investment-related risks, we actively manage operational and governance risks.

Our internal framework includes:

Clearly defined roles and responsibilities
Structured decision-making and oversight processes
Documentation and record-keeping standards
Ongoing review of internal controls and procedures

These measures support operational stability, accountability, and consistency across all client mandates.

Responsibility & Capital Stewardship

We view the management of client capital as a long-term responsibility that extends beyond short-term performance considerations.

Our approach to responsibility is grounded in:

Acting at all times in the best interests of clients
Exercising discipline and restraint in investment decision-making
Avoiding unnecessary complexity and excessive leverage
Focusing on sustainable outcomes across market cycles

Capital stewardship requires judgement, patience, and a long-term perspective.

Transparency & Client Communication

Responsible risk management includes clear and transparent communication with clients.

Clients receive:

Regular reporting on portfolio composition and risk exposure
Ongoing updates on material developments affecting their portfolios
Clear explanations of how risk is managed within the agreed framework

We maintain open dialogue to ensure that expectations remain aligned and that clients have a clear understanding of their portfolios.

Continuous Review & Evolution

Risk management is not static. Markets, regulations, and client circumstances evolve over time.

We therefore:

Review risk frameworks and processes regularly
Adapt oversight practices to changing market conditions
Ensure continued alignment with regulatory expectations and best practice

This continuous review supports resilience and long-term consistency.

Our Commitment

Our commitment is to manage risk responsibly, apply disciplined judgement, and uphold Swiss standards of professionalism, governance, and integrity in the stewardship of client capital.