IMPORTANT GENERAL RISK WARNING
Capital invested in financial instruments is exposed to a wide range of risks, including the possible loss of the entire amount invested and, in certain circumstances, losses exceeding the amount originally invested (for example, where leverage or derivative instruments are used). The following description of risks is of a general nature, is non-exhaustive and does not override or replace any specific risk disclosures contained in the applicable fund prospectus, offering memorandum, subscription documents, mandate agreement or any other legally binding documentation (together, the “Offering Documents”). In the event of any inconsistency, the Offering Documents shall prevail.

Investors shall carefully review all risk factors set out in the relevant Offering Documents and shall obtain independent professional advice before making any investment decision.

1. GENERAL CAPITAL AND MARKET RISKS

1.1 Capital Risk
The value of any investment can both increase and decrease in response to a wide range of economic, political, market, regulatory and psychological factors. There is no guarantee that the invested capital will be preserved, and investors may not recover the amount originally invested.

1.2 General Market Risk
Investment markets are influenced by global and local macroeconomic developments, monetary and fiscal policies, geopolitical events, changes in investor sentiment, technological disruptions and environmental events.
– Sudden market dislocations, liquidity shortages or “flight-to-quality” movements may lead to rapid and material decreases in asset values.
– Correlations between asset classes may increase during periods of market stress, thereby reducing the benefits of diversification.

1.3 Volatility Risk
The prices of financial instruments may fluctuate significantly over short periods. High volatility can amplify both gains and losses and may adversely affect the ability to implement investment strategies, rebalance portfolios or exit positions at anticipated prices.

1.4 Inflation and Purchasing Power Risk
Inflation may erode the real value of investment returns. Even where nominal returns are positive, real returns (after inflation) may be low or negative.

1.5 Reinvestment and Cash Drag Risk
Income or proceeds from maturing or sold investments may need to be reinvested at lower prevailing yields (“reinvestment risk”). Conversely, holding excess cash or cash equivalents may reduce potential returns (“cash drag”).

2. ASSET CLASS–SPECIFIC RISKS (NON-EXHAUSTIVE)

2.1 Risks Relating to Alternative Investments
Alternative investments (including hedge funds, private equity, private debt, infrastructure, real assets and certain absolute return strategies) typically involve:
(a) leverage risk – the use of borrowing, derivatives or other forms of leverage can magnify losses and may result in losses exceeding the amount initially invested;
(b) illiquidity risk – interests may be illiquid, subject to lock-up periods, infrequent dealing days, redemption gates, side-pockets or suspensions;
(c) valuation risk – assets may be valued infrequently, based on estimates, models or appraisals, which may differ from realizable prices;
(d) complex strategy risk – investment strategies may be complex, dependent on manager skill and difficult for investors to fully understand or monitor;
(e) concentration and counterparty risks – strategies may entail concentrated exposures and reliance on multiple counterparties, prime brokers, financing providers and administrators.

2.2 Risks Relating to Asset-Backed and Mortgage-Backed Securities (ABS/MBS)
Investments in asset-backed or mortgage-backed securities are subject to, inter alia:
(a) prepayment and extension risk – changes in prepayment behaviour (e.g. borrowers repaying earlier or later than expected) affect cash flows, yield and duration;
(b) structural and tranche risk – different tranches may have varying seniority, credit enhancement and loss allocation;
(c) credit and collateral risk – deterioration in the credit quality of underlying borrowers or collateral may lead to losses;
(d) complexity risk – structures may be highly complex, making risk assessment and valuation challenging;
(e) liquidity risk – secondary markets may be thin or impaired, particularly in stressed conditions.

2.3 Sub-Investment Grade / High Yield Securities
Securities rated below investment grade (or unrated securities of comparable quality) typically exhibit:
(a) higher credit risk – greater likelihood of default on interest and/or principal;
(b) heightened price volatility – values may react strongly to changes in issuer fundamentals, interest rates and market conditions;
(c) reduced liquidity – the secondary market is often less liquid than for investment grade instruments, with wider bid-offer spreads and potential difficulty in transacting at desired prices or volumes.

2.4 Equity / Common Stock Risks
Equities represent ownership interests in an issuer and are subject to:
(a) business and earnings risk – corporate profitability, management quality, competitive position and sector dynamics may change;
(b) market sentiment risk – prices may be driven by investor sentiment and technical factors rather than fundamentals;
(c) event and idiosyncratic risk – corporate actions, litigation, regulatory changes or scandals may significantly affect individual issuers;
(d) sector and style risk – certain sectors (e.g. technology, biotech) or styles (e.g. growth, value) may experience periods of pronounced underperformance;
(e) equity market volatility – some equity markets, particularly in smaller or less developed countries, may be significantly more volatile and less liquid than major developed markets.

2.5 Fixed Income / Bond Market Risks
Fixed income securities are subject to:
(a) interest rate risk – bond prices generally move inversely to interest rates; longer duration securities are more sensitive to rate changes;
(b) credit risk – deterioration in the creditworthiness of an issuer or guarantor may lead to spread widening and price declines, or default;
(c) reinvestment risk – coupons or redemptions may be reinvested at lower interest rates;
(d) yield curve and spread risk – changes in the shape of the yield curve, or in credit spreads, may adversely affect valuations;
(e) inflation risk – inflation may erode the real value of fixed coupon payments.

2.6 Foreign and Emerging Markets Risk
Investments in foreign, emerging or frontier markets may be subject to:
(a) currency and exchange control risk – currency fluctuations may affect returns; capital controls and restrictions on currency conversion or repatriation may be imposed;
(b) lower liquidity – markets may be smaller, less liquid and more prone to sharp price movements;
(c) reduced information and transparency – financial reporting, disclosure standards and market data may be less comprehensive or reliable;
(d) political and legal risk – instability, weak institutions, unpredictable legislation, expropriation or nationalization may adversely affect investments;
(e) regulatory and custodial risk – regulatory frameworks and investor protections may be less developed; custody and settlement systems may be less robust;
(f) higher volatility – price moves may be more extreme than in developed markets, especially in times of stress.

2.7 Commodity-Related Risks
Exposure to commodity markets (including via derivatives, commodity indices or commodity-linked securities) may involve:
(a) high price volatility – commodity prices can be extremely volatile, influenced by supply and demand imbalances, geopolitical tensions, weather, technological changes and speculative activity;
(b) basis and roll risk – futures-based strategies may underperform spot prices because of contango/backwardation and roll costs;
(c) sector-specific risk – events affecting particular sectors (energy, agriculture, metals) can materially affect returns;
(d) regulatory and position limit risk – changes in regulation, position limits or trading rules may restrict strategy implementation.

2.8 Real Estate and Real Estate-Related Securities
Investments in real estate or real estate-related securities (including REITs) are subject to:
(a) property market risk – cyclical nature of property values and rental income;
(b) interest rate risk – rising interest rates may increase financing costs and reduce property values;
(c) geographic and sector concentration – dependence on regional economic conditions or specific property types;
(d) regulatory and environmental risk – zoning, planning, environmental and other regulatory restrictions may affect development and operating costs;
(e) liquidity risk – direct real estate investments may be highly illiquid; even listed property securities can become illiquid in stressed markets.

2.9 Small and Mid-Capitalisation Equity Risks
Securities of smaller or mid-sized issuers may:
(a) be more volatile than those of larger, more established companies;
(b) be less liquid, with lower trading volumes and wider bid-offer spreads;
(c) depend more heavily on limited management and financial resources;
(d) have less diversified business models.

2.10 Investments in Other Funds (“Fund of Funds”)
Investments in other funds expose investors, proportionally, to the underlying risks of such funds. Additional risks include:
(a) layered fees – investors may bear both the fees of the underlying funds and those of the investing fund;
(b) transparency risk – limited visibility into underlying holdings and strategies;
(c) dependency on third-party managers – performance depends on selection and skill of underlying managers.

3. STRATEGY-SPECIFIC AND STRUCTURAL RISKS

3.1 Concentration Risk
Portfolios that are concentrated in a limited number of issuers, sectors, strategies, regions or asset classes may experience higher volatility and more pronounced drawdowns than more diversified portfolios. Adverse developments affecting a single exposure or theme may have a disproportionately large impact on performance.

3.2 Credit Risk
Credit risk arises from the possibility that an issuer, guarantor or counterparty fails to meet its obligations in full and on time. This may result from:
(a) deterioration in financial condition;
(b) economic or sector downturns;
(c) downgrades by rating agencies;
(d) idiosyncratic events (fraud, litigation, regulatory fines, etc.).
Lower-rated or unrated securities generally carry higher credit risk.

3.3 Counterparty Risk
Counterparty risk arises where the performance of a transaction depends on the solvency, reliability and operational capability of a counterparty (e.g. in derivatives, securities lending, repo or OTC transactions). Counterparty default or failure may cause delay in recovery of amounts due, partial recovery or total loss.

3.4 Currency / Foreign Exchange Risk
Investments denominated in, or exposed to, foreign currencies are subject to movements in exchange rates, which may increase or decrease investment values when converted into the investor’s reference currency. Currency markets may also be affected by capital controls, central bank interventions and political events.

3.5 Interest Rate Risk
Changes in interest rates (policy rates or market yields) directly affect the valuation of interest-sensitive instruments (such as bonds, loans, rates derivatives) and may indirectly influence equities and other asset classes. Longer-duration instruments are generally more sensitive to interest rate changes than shorter-duration instruments.

3.6 Hedging Risk
Hedging strategies (e.g. using derivatives or offsetting positions) may:
(a) not perfectly correlate with the underlying exposures;
(b) be imperfectly implemented or adjusted;
(c) be unavailable or uneconomical under certain market conditions;
(d) create additional costs and complexity.
As a result, hedges may be ineffective or may even amplify losses.

3.7 Leverage Risk
Use of leverage (through borrowing, derivatives, securities financing transactions, or other means) may:
(a) magnify gains and losses;
(b) increase sensitivity to market movements;
(c) lead to margin calls, forced liquidations or the need to post additional collateral at short notice;
(d) create liquidity pressures if funding sources are reduced or withdrawn.

3.8 Long/Short Strategy Risk
Long/short strategies involve taking both long positions (benefitting from price increases) and short positions (benefitting from price decreases). Specific risks include:
(a) directional risk – if both long and short positions move adversely (e.g. longs fall and shorts rise), losses may be magnified;
(b) short squeeze risk – sharp upward moves in shorted securities may generate significant losses;
(c) borrowing and recall risk – inability to borrow or recall of borrowed securities may force closure of positions at unfavourable prices.

3.9 Short Selling / Short Exposure Risks
Short selling strategies are subject to:
(a) theoretically unlimited loss potential – if the price of a shorted security rises significantly;
(b) margin and collateral requirements – which may change rapidly in volatile markets;
(c) borrowing costs and recall – changes in securities lending conditions may affect strategy implementation;
(d) regulatory constraints – bans or restrictions on short selling may be imposed with little notice.

3.10 Derivative Instrument Risks
Derivatives (including futures, options, swaps, forwards and structured products) can be highly sensitive to changes in underlying variables (e.g. interest rates, credit spreads, volatility, prices, indices). Core risks include:
(a) market risk – derivative values may change disproportionately relative to underlying assets;
(b) counterparty risk – default of the derivative counterparty;
(c) liquidity risk – some derivatives may be thinly traded or may become illiquid in stressed markets;
(d) valuation and model risk – complex pricing models involve assumptions that may not hold;
(e) leverage risk – small market moves can lead to outsized profits or losses;
(f) operational risk – complexity increases the risk of documentation, valuation, settlement or collateral management errors.

3.11 Repo and Reverse Repo Transaction Risks
Repurchase (“repo”) and reverse repurchase transactions involve:
(a) counterparty and collateral risk – the failure of the counterparty may lead to losses if collateral values are insufficient or not readily realisable;
(b) market and liquidity risk – collateral values may fall or become illiquid;
(c) legal and documentation risk – enforceability of collateral arrangements may depend on applicable law and proper documentation.

3.12 Liquidity Risk
Liquidity risk arises where investments cannot be sold, realized or unwound at or near their perceived fair value within a reasonable timeframe. It may be caused by:
(a) limited market depth or trading volumes;
(b) wide bid-offer spreads;
(c) trading halts, suspensions or exchange closures;
(d) regulatory or contractual restrictions;
(e) market stress events.
In extreme cases, forced sales at depressed prices may occur, or redemptions from investment vehicles may be deferred, gated or suspended.

3.13 Manager / Strategy Risk
Investment performance depends on the skill, judgement and continuity of portfolio managers and investment teams.
(a) Changes in personnel, processes or ownership may affect strategy execution.
(b) Investment approaches may fail to perform as anticipated in certain market environments or may be based on assumptions that cease to hold.
(c) Capacity constraints may affect the ability to implement strategies effectively at larger asset sizes.

3.14 Model and Quantitative Strategy Risk
Where investment decisions are based, in whole or in part, on quantitative models, algorithms or statistical analyses, risks include:
(a) model specification and data errors;
(b) overfitting and reliance on historical relationships that may not persist;
(c) behavioural changes by market participants;
(d) technological failures or implementation errors.
Model risk may lead to unexpected losses when actual market behaviour diverges from model assumptions.

4. OPERATIONAL, REGULATORY AND OTHER RISKS

4.1 Operational Risk
Operational risk refers to losses or adverse outcomes resulting from inadequate or failed internal processes, people, systems or external events, including:
(a) human error or fraud;
(b) system failures, outages or cyber attacks;
(c) errors in trade execution, settlement, valuation, reconciliation or reporting;
(d) failures of counterparties, custodians, administrators or other service providers.

4.2 Cybersecurity and Technology Risk
Dependence on information technology and electronic communications exposes investments and operations to cyber risks, including:
(a) unauthorized access, data breaches or theft of confidential information;
(b) malware, ransomware, denial-of-service attacks;
(c) manipulation of data or systems;
(d) disruption of trading, settlement or valuation processes.
Cyber incidents may result in financial loss, regulatory sanctions, reputational damage and operational disruption.

4.3 Legal, Regulatory and Tax Risk
(a) Changes in law, regulation, supervisory practice, accounting standards or tax rules may adversely affect investments, structures and after-tax returns.
(b) New regulations (for example, relating to capital markets, derivatives, ESG, data protection, sanctions, consumer protection) may restrict or burden investment strategies.
(c) Tax treatment may vary by investor and jurisdiction; retrospective changes are possible. There is no guarantee that current tax assumptions or regimes will remain in force.

4.4 Documentation and Enforceability Risk
The legal rights associated with investments (including ownership rights, collateral, priority in insolvency, etc.) depend on the correct drafting, execution and enforceability of contracts, as well as local legal and insolvency regimes. Legal uncertainties or deficiencies may impair the ability to enforce rights or recover value.

4.5 Custody and Settlement Risk
(a) Safekeeping of assets by custodians or sub-custodians may be subject to local law and market practice.
(b) There is a risk of loss if a custodian or sub-custodian becomes insolvent or otherwise fails.
(c) Settlement systems in certain markets may be less robust, increasing the risk of failed or delayed settlement.

4.6 Environmental, Social and Governance (ESG) and Sustainability Risk
Sustainability risk is defined as an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment. Examples include:
(a) environmental – climate change, extreme weather events, resource depletion, pollution, biodiversity loss;
(b) social – labour disputes, human rights violations, community opposition, product safety issues;
(c) governance – weak governance structures, corruption, fraud, inadequate risk controls.
ESG factors may also lead to reputational risk, litigation risk and regulatory intervention. Data limitations and divergent methodologies may affect ESG assessments.

4.7 Force Majeure and Extraordinary Events
Extraordinary events (such as natural disasters, pandemics, wars, terrorism, systemic financial crises, or widespread infrastructure failures) may:
(a) disrupt markets, valuations, liquidity and operations;
(b) impair the ability to implement strategies, trade, value assets, meet redemption requests or perform contractual obligations.
Such events are inherently unpredictable and may lead to outcomes beyond the control of any party.

5. SPECIFIC NOTES ON DIVERSIFICATION AND RISK

5.1 Diversification
Diversification is a risk management technique that involves spreading investments across multiple assets, sectors, regions or strategies. While diversification may reduce idiosyncratic risk, it does not:
(a) guarantee a profit;
(b) eliminate the risk of loss;
(c) protect against systemic or market-wide events in which correlations between asset classes may increase.

5.2 Non-Exhaustive Nature of this Risk Disclosure
The risk factors described above do not purport to be an exhaustive list of all risks associated with any particular investment, strategy, vehicle or mandate. Additional or different risks may be relevant depending on the nature, structure and jurisdiction of the investment.

6. INVESTMENT DEFINITIONS AND RISK METRICS

The following non-exhaustive definitions are provided for convenience only. Actual usage, formulas and conventions may vary by manager, index provider or data vendor.

6.1 Alpha
Alpha typically measures risk-adjusted performance relative to a benchmark, often defined as the excess return of a portfolio over the return predicted by a given risk model (e.g. the Capital Asset Pricing Model). Positive alpha indicates outperformance versus the modelled expectation; negative alpha indicates underperformance.

6.2 Beta
Beta measures the sensitivity of an investment’s returns to movements in a specified market or benchmark index.
– A beta of 1 implies that the investment tends to move broadly in line with the benchmark.
– A beta greater than 1 indicates higher sensitivity (more volatile than the benchmark).
– A beta less than 1 indicates lower sensitivity.

6.3 Correlation
Correlation is a statistical measure of the degree to which two variables move together.
– A correlation of +1 indicates that two variables move perfectly in the same direction.
– A correlation of –1 indicates that they move perfectly in opposite directions.
– A correlation near 0 indicates little linear relationship.

6.4 CPI – Consumer Price Index
The Consumer Price Index (CPI) is an indicator of changes in the average price level of a basket of goods and services typically purchased by households. CPI is commonly used as a proxy for inflation.

6.5 Loss Risk / Downside Risk
Loss risk refers to the potential for negative returns, including the magnitude and probability of losses over a given period. Various quantitative measures (e.g. downside deviation, maximum drawdown, value-at-risk) may be used to assess loss risk.

6.6 Duration
Duration measures the sensitivity of the price of a fixed income instrument or portfolio to changes in interest rates, expressed in years.
– A higher duration means greater price sensitivity to interest rate changes.
– Approximate rule: a duration of 5 implies that a 1 percentage point increase in interest rates may lead to an approximate 5% price decrease, all else equal.

6.7 Strategic Asset Allocation
Strategic asset allocation generally refers to the long-term target allocation across asset classes or risk premia, based on an investor’s objectives, risk tolerance, time horizon and constraints. It typically assumes infrequent changes.

6.8 Tactical Asset Allocation
Tactical asset allocation refers to shorter-term deviations from the strategic asset allocation, motivated by views on relative valuations, expected returns or market conditions. Tactical positions are usually time-limited and adjusted more frequently.

6.9 Tracking Risk / Tracking Error
Tracking risk (often referred to as tracking error) measures the volatility of the difference between a portfolio’s returns and those of its benchmark. A higher tracking error indicates greater dispersion from benchmark performance, whether positive or negative.

6.10 Volatility
Volatility is a statistical measure of the dispersion of returns, often expressed as the annualized standard deviation of periodic returns.
– Higher volatility indicates larger potential deviations from the average return (both positive and negative).

6.11 Value-at-Risk (VaR)
VaR estimates the potential loss in value of a portfolio over a specified time horizon at a given confidence level (e.g. “1-day 99% VaR”). It is a model-based measure and subject to significant limitations, particularly in extreme market conditions.

6.12 Sharpe Ratio
The Sharpe ratio measures risk-adjusted performance by comparing the excess return of a portfolio (over a risk-free rate) to its volatility. Higher values indicate more return per unit of risk, but the ratio is sensitive to the period, inputs and assumptions used.

6.13 Maximum Drawdown
Maximum drawdown represents the largest peak-to-trough decline in the value of a portfolio over a specified period. It is a measure of historical downside risk and does not predict future drawdowns.

7. FINAL REMARKS ON RISK DISCLOSURE

This Investment Risks section is intended as a high-level, general description of common risk categories associated with different types of investments and strategies. It does not replace or supersede any risk information contained in the relevant Offering Documents, which must always be consulted and prevail.

Before making any investment decision, investors shall carefully consider:

– their investment objectives,
– their risk tolerance, financial circumstances and investment horizon,
– all risks, fees and costs described in the relevant Offering Documents, and
– the need to obtain independent professional advice (including legal, tax and financial advice) appropriate to their individual situation.