Liontrust Responsible Capitalism Report 2024 - Flipbook - Page 24
RESPONSIBLE CAPITALISM AND MANAGING RISKS,
CONFLICTS OF INTEREST, AND INSIDE INFORMATION
RESPONSIBLE CAPITALISM AND RISK MANAGEMENT
Responsible Capitalism and the assessment of risk and opportunity
go hand in hand, both in terms of Liontrust’s own business operations
(at the PLC level) and in terms of the investments the Group’s fund
management teams make on behalf of clients (at the investment
level). Understanding the risks for the PLC enables Liontrust to focus
its efforts on mitigating those exposures, so that its business, as an
asset manager, is more efficient and able to service clients better.
Similarly, it may be helpful for the investment teams to understand the
main risks and opportunities that their investments face, especially
within the context of their individual investment processes. Many of
the main risks that Liontrust’s own business faces are similar to those
that are faced by Liontrust investee companies.
The Group provides details on its investment teams’ investment
processes and the engagements each has undertaken during the
reporting period (see more information in this report on pages 40–91).
LIONTRUST AND RISK
How the PLC assesses risk
Liontrust reports extensively on its risk management processes and
systems in the Liontrust Asset Management PLC Annual Report
and Financial Statements. The Group thinks holistically about risk
and is building in opportunity assessment into this framework. As
noted in the Liontrust Asset Management PLC Annual Report and
Financial Statements, Liontrust’s Enterprise Risk Management (ERM)
framework is overseen by the Risk team and is used to ensure that
the Group regularly reviews and monitors all the potential areas
of risk to the business. This framework enables management, the
Audit & Risk Committee, and the Board to be kept fully informed of
potential risks to the business and how these risks would impact the
Group’s capital adequacy.
In terms of its investments, Liontrust monitors its investment teams
and funds to ensure prudent levels of risk are taken to meet the
investment objectives and policies of the funds. The funds have
pre-determined risk controls and these are supported by the
investment teams, the investment processes and by the Risk team.
Liontrust’s risk structure
The diagram below summarises the key elements of the Group’s
ERM Framework which is based around these risk areas to ensure
a consistent approach across the framework.
Liontrust Board
Audit & Risk Committee
Risk Appetite
Statement (RAS)
Internal Capital Adequacy
and Risk Assessment
(ICARA)
Credit Risk Report
24 - Responsible Capitalism Report 2022
Operational Risk Report
Enterprise Risk Report
(regular risk reporting)
Portfolio Risk Report
Other risk summary