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Due Diligence FAQs

What is the role of a risk committee at an investment manager?

The manager should establish a risk committee to provide the management oversight of the risk function. The Risk Committee should have a suitable level of independence from the investment function and should consider not only investment risk, but also operational and counterparty risk.

The risk committee should keep formal written records of the committee’s discussions and actions. If it has no records or a limited scope of review, investors should be cautious as to whether it is efficient at all.

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