The financial turmoil has shown how important it is to understand and manage risks within financial institutions. In that context, the Regulatory environment has evolved to reinforce the Risk Management analysis and skills within the industry.
This change should not be underestimated and especially in the context of AIFMD. As a matter of fact, the risk management function is one of the two key functions (portfolio management being the second) that needs to be part of the activities of an AIFM.
This is particularly relevant for Luxembourg where portfolio management may not be fully performed within the AIFM and where the risk management function will need to be enhanced or reinforced. The Risk Management provisions of the AIFMD remain mainly principle based and do not take into account the specificities of the different sectors impacted. The range of types of assets that could be invested in by an AIF is nearly unlimited (e.g. bonds, equities, derivatives, funds, Real Estate. Private Equity, Infrastructure,...) and the same applies for the strategies (e.g. Hedge Fund: Long/short, CTA, Market neutral,... Real Estate: Core, Core +, Opportunistic,... Private Equity: Leverage buy out, Secondary, Mezzanine...).
The risk management policies, processes and procedures need to be adapted to each asset class and to the risk profile of each AIF. Risk Management is not new to the Alternative Investment Management industry. However, the Directive introduces increased formalization, prescribes the timing, extent and nature of controls and oversight to be performed, to a level that many players have not had to deal with so far. Future AIFMs need risk management experts that understand their industry, the regulatory requirements and are properly equipped to fulfil their obligations.
In that context, PwC’s Academy has developed an advanced training program providing participants with the right level of knowledge as well as a set of tools and techniques that will allow them to get up to speed and ready to properly answer the expectations of the Regulator, the Board and Investors. In order to focus on the requirements dedicated to the main investment categories that can be found within the industry,we have developed these focused sessions:
- Become an AIFMD Risk Manager – Focus on Hedge funds
- Become an AIFMD Risk Manager – Focus on Private Equity
- Become an AIFMD Risk Manager – Focus on Real Estate
At the end of the training participants will be able to:
- Master the impacts of AIFMD in terms of Risk Management (Governance, Risk Management Procedures, Disclosure ...);
- Define a Risk Profile using adequate approaches;
- Define an adequate Risk appetite and the related monitoring techniques;
- Apply Risk Management principles throughout the investment process (mainly for non-traded assets);
- Select and implement the different techniques and metrics required to monitor the five key risk aspects that need to be covered within AIFMD:
- Market risk - Counterparty risk - Credit risk - Operational risk - Liquidity risk
- Understand in detail the valuation principles (mainly for investments in non-traded assets) given the relevant of valuation in the Risk assessment and monitoring.
- Risk Management under AIFMD (including ‘real life’ examples )
- Risk profiling: specificities of Real estate environments
- Market Risk: analysis of the different techniques/metrics and their adequacy depending on the AIF’s strategy
- Leverage: methods used to generate and measure leverage
- Liquidity risk: how to manage it from both an asset and liability perspective?
- Counterparty risk: how to properly manage it and implication of future regulatory changes (EMIR)?
- Credit risk: measurement techniques
- Operational risk: to what extend operational risk could be material to the AIF and its investors and what are the existing techniques to monitor it?
- Risk dashboard: risk measures are only efficient when they are clearly reported. How to properly structure Risk dashboards?
- Valuation: interaction between valuation principles and risk assessment are multiple, how to properly leverage on it?
- Disclosure requirements: the level 2 guidelines have confirmed a detailed set of reporting requirements. What does it imply from a Risk Management standpoint?
The sessions will include both presentation and workshops giving the opportunity to participants to put the recommendations into practice and share experience/views with others.
Feedbacks from past participants
- "Really useful, applicable easily"
- "Pragmatic approach, completeness, good presenters"
- Current and future Risk Managers
- ManCo/AIFM Conducting officers/Directors in charge of Risk Management
- ManCo/AIFM Board members
Our lead experts
In order to guarantee you that you will be provided with the expert toolbox at the end of the session, we have gathered our most senior experts to train you:
- Marie-Elisa Roussel, Partner, AIFMD leader
- Johh Ravoisin, Partner, Real Estate
- Benjamin Gauthier, Partner, Risk Management expert
- Alexandre Goossens, Director, Real Estate valuation expert
Number of participants: Limited to 20 participants to ensure a good interactivity.
Duration: 1 day