Investment Risk Management

Agaciro takes an asset-by-asset view of risk, combining financial health metrics, structural indicators, and sector-specific considerations. For equity investments, the focus is operating cashflow generation, revenue growth, profitability margins (EBITDA, EBIT, and net margin), dividend yield, and the viability of exit pathways. For debt investments, the primary metrics are average Debt-to-EBITDA on a portfolio-weighted basis, interest coverage ratios, and exposure to floating versus fixed rate instruments.

Beyond financial metrics, the Investment Department watches operational and structural indicators for each holding: customer and counterparty concentration, working capital cycles, leverage against asset quality and collateral, and capacity utilisation. It pays particular attention to FX mismatches between hard-currency obligations and local-currency revenues, to the offtake and contractual arrangements behind long-dated assets, and to early signs of margin compression or deteriorating asset quality.

Breaching any of the following prompts a formal review of the position:

Monitoring runs continuously in the Investment Department and is reviewed by the Risk Department, with material developments reported to the Board Investment Committee each quarter. Where a portfolio company breaches one or more alert thresholds, the Investment Department prepares a written assessment of the risk, its potential impact on the Fund, and any proposed remedial or protective action.