Risk Management

Whilst we continually strive to meet our investment objective, we believe we also have a responsibility to safeguard our clients' funds. As absolute investors we associate risk with loss and we consider that the most important risk management we carry out is bound up in our company selection and valuation process. We select the most prospective industries and companies according to carefully thought out criteria. In the same process we eliminate industries and companies that face headwinds or other major problems (i.e. economic risk). We then conduct a DCF valuation to help us identify and avoid extreme or speculative pricing (price risk).

We also adhere to the following guidelines in order to limit concentration risk. The percentages are the maximum amount of the Fund’s total net asset value (at cost) that can be invested in securities in: 
 

No investment in any equities not listed on any stock exchange or securities market

*Please note that in calculating the percentage of the Fund’s NAV in any single country, only investments in securities in that country are included – any cash that may be held in that country’s currency is excluded.

• The Funds' Trust Deeds allow borrowings of up to 25% of the net asset value of the Funds, however the Managers have, to date, never availed themselves of this facility.
• The Funds use derivatives selectively and only on a cash covered or stock covered basis.
• All equity investments must be quoted on a recognized stock exchange.
• Investors' monies are handled by the Funds' external administrator and prime broker.

The additional procedures and measures outlined below reflect the high importance we place on compliance with both industry regulators and our investment guidelines:

• Allard Partners and the Funds are audited on an annual basis.
• The Funds' trustees monitor our overall compliance with the investment guidelines as set out in the Funds' Trust Deeds.
• Allard Partners Limited (APL) is licensed and regulated by the Securities and Futures Commission in Hong Kong and registered with the US SEC under the Investment Advisor Act. APL's associate, Allard Partners Australia Limited, is an Australian Financial Services Licensee and is regulated by the Australian Securities & Investments Commision.
• All employees have agreed to abide by the staff 'dealing rules' that prohibit securities trading and limit personal account investment.

We also point out that each Director has a significant investment in the Allard Partner Funds.

Over and above all of these measures, however, we believe our best “risk control” is the experience and integrity of our team, the comprehensive knowledge of our underlying investments and our dedication to investment excellence.