Objective
Analyze the risks associated with the creation and operation of a real estate portfolio/fund for the purpose of presentation to investors, creditors, and for internal decision-making purposes.
Provide confidence and transparency to investors
Analyze volatility that may impact fund performance
Demonstrate accountability for fund return and risk objectives
Opportunity
Identify potential risks at the fund and asset level that may impact performance or identify imbalances in risk and return.
– Identify potential risks of the real estate strategy
– Develop tactics to counteract the effects of the fund’s external and internal risks
Solution
Perform a risk assessment that allows a reader to clearly visualize and analyze the risk factors of a fund.
– Analyze the risks at the fund level and each asset in the portfolio
– Present a model to assess and visualize potential risks in a clear and objective way
Process
Fund Level Risks
– Market Risk
– Credit – Counterparty Risk
– Operational Risk (Governance)
– Liquidity Risk
– Strategy Risk
Asset Level Risks (Performed for Each Asset of Portfolio)
– Market Risk
– Credit Risk
– Liquidity Risk
– Business Risk
– Operational Risk
– Valuation Risk
