Eclipse Fund
- Maximum single position
- 20% of Eclipse Fund NAV
- Portfolio size
- 20–30 securities, approximately
Risk management
Risk informs which opportunities we pursue, how much capital we commit and when exposure needs to change.
Research, position limits, liquidity and ongoing review guide these decisions. They cannot eliminate investment risk or guarantee against loss of capital.
On this page
Portfolio parameters
Each strategy combines a maximum single-position limit with an approximate portfolio size. NAV means net asset value.
Nova Fund
- Maximum single position
- 20% of Nova Fund NAV
- Portfolio size
- 15–30 securities, approximately
These parameters describe portfolio construction, not current holdings or a maximum possible loss. A portfolio can remain within its position limits and still suffer substantial losses.
Risk through the decision
Risk assessment begins before capital is committed and continues while a position is held. Downside, valuation and liquidity influence whether an idea proceeds and how much exposure it receives.
The Investment Process explains Opportunity Screening, Investment Research and Valuation & Monitoring. Here, the focus is how individual risks can affect the wider portfolio and what may prompt a change in exposure.
Risks and responses
Risks can reinforce one another. A business setback can coincide with a market decline, a currency move and reduced liquidity.
Market and concentration
Several holdings can fall together as markets, interest rates or conditions change. A position limit does not prevent correlated losses.
Position size, cash and hedging shape exposure. Reducing a position can limit further exposure, but hedges may be costly or imperfect.
Thesis and signal failure
A recovery may fail, business quality may deteriorate, or a model or catalyst may stop supporting the investment case.
Revisit the evidence behind the position. A changed thesis, failed signal or completed event may lead to resizing or exit.
Valuation and expectations
Estimated fair value depends on assumptions. A low price can reflect lasting impairment, and the market may take longer than expected to recognise value.
Research tests price against business evidence and downside scenarios. Reassess the case as earnings, expectations and the price change; estimated downside is not a loss boundary.
Liquidity, currency and execution
During stress, spreads can widen and positions can become difficult to close. Exchange-rate movements can also affect returns independently of the underlying investment.
Liquidity informs position size and the ability to adjust exposure. Holding cash or reducing positions may help preserve flexibility, although execution may be slower or more costly than expected.
Options, derivatives and margin
Options can limit upside or require buying shares above market value. Derivatives and leverage can amplify losses, and margin requirements can create additional cash needs.
Consider the instrument alongside the underlying exposure and available cash. Premium received is not total investment profit; some structures can lose more than the premium.
Operations and counterparties
Failures in execution, custody, clearing, lending or counterparties can affect the portfolio independently of the investment thesis.
These risks sit alongside market and investment-case assessment. Research, diversification and position limits cannot eliminate losses caused by operational or counterparty failures.
Different mandates, different exposures
The same risk can matter differently across the two strategies. Their investment case and instruments shape the evidence used to review a position.
Investment case
Eclipse
Recovery from crisis-driven mispricing; business survival, quality and permanent-loss risk remain central.
Nova
Business evidence, market expectations, catalysts and quantitative signals inform opportunities across several methods.
Instruments and exposure
Eclipse
Equity ownership with options and securities lending. Borrowing leverage is not a primary investment tool; derivatives can still add economic exposure.
Nova
Equities, options, gold and tactical multi-asset strategies. Derivatives and margin can amplify losses or require cash.
Monitoring evidence
Eclipse
Research continues through the holding period, revisiting the recovery, valuation and business quality.
Nova
Daily review considers positions and changing conditions alongside business evidence, sentiment, events and market signals.
Resize or exit
Eclipse
Fair value is reached, the thesis completes or breaks, business quality worsens or capital has a better use. Decisions remain thesis-based.
Nova
A target or event completes, evidence deteriorates, conditions change or portfolio needs take priority.
Eclipse does not publish a numerical portfolio-level drawdown limit. Neither strategy offers capital protection.
Review and governance
Research, sizing, monitoring and portfolio response are connected decisions. A change in the evidence may call for further research, a smaller position, hedging, more cash or an exit.
Investment judgment also depends on the platform’s responsibilities and standards. The Governance page provides the related platform context; the fund pages explain each strategy’s methods and risk considerations.
Explore further
Investments involve risk, including significant loss of capital. The disciplines described here do not guarantee a return or prevent losses. Read the disclaimer