Examine what could change.
Regalis evaluates risk in the context of the asset, the structure and the portfolio. Due diligence supports a decision; ongoing monitoring tests whether the assumptions behind that decision continue to hold.
REGALIS / Risk and Due DiligenceEvidence before commitment. Attention afterwards.
Property credit requires attention to security, value, repayment and enforcement. Development adds completion and sales risk. Private equity requires a deeper understanding of business operations and ownership rights. Public markets bring market, currency and manager risks that need a different assessment.
A useful risk explanation identifies what could happen, how it would affect the investment and what response may be available. It should not rely on reassuring words such as secured, diversified or conservative without explaining the conditions behind them.
Where an issue develops, the reporting framework should distinguish between an emerging concern, a missed obligation, a revised valuation and a realised loss. Investors need information that reflects the situation.
Match the review to the asset
| Area of focus | What to consider |
|---|---|
| Financial resilience | Examine the sources and timing of cash, obligations ranking ahead of the investment and the capacity to absorb weaker trading, higher costs or a delayed exit. Models need plausible assumptions connected to supporting information. Borrowing terms and refinancing dependencies affect the choices available when conditions change. |
| People and counterparties | Assess the capability, incentives and responsibilities of management, sponsors, borrowers and external providers. Consider ownership, relevant experience and operational dependencies. Understand how decisions are made when interests differ, and which information or specialist input is needed to test the representations made during assessment. |
| Legal and portfolio structure | Review the interest acquired, information rights, security where relevant and restrictions on transfer or redemption. Consider concentration by asset, sector, counterparty and economic driver alongside capital commitments. Individually acceptable positions can create unsuitable overall exposure when they depend on similar conditions or compete for liquidity. |
Diligence continues after the decision.
The initial review establishes a case to monitor. Useful questions include whether the asset is performing as expected, whether information remains reliable and whether a material assumption has changed. A missed milestone can require investigation before it becomes a missed payment or a revised valuation. The response should reflect the asset and the evidence.
Risk oversight also needs escalation. The appropriate response may involve additional information, specialist advice, tighter controls, a revised plan or action under the relevant documents. Investors should understand how significant developments will be communicated. An update should distinguish an emerging concern from impairment or realised loss, and explain the basis and date of any revised valuation. Diligence supports judgement without eliminating uncertainty.
Ask About Our Assessment Process
Start with a focused conversation. Tell us your objectives, the capital you are considering and the questions you would like to resolve. We can explain the relevant information and agree a useful next step.