Redemption-Liquidity Risk Architecture Director

The mandate

The manager offers funds whose redemption promises, notice periods and portfolio liquidity are described through different clocks. Investor dealing data assumes requests arrive independently, portfolio models rely on broker quotes or contractual maturities, and treasury counts facilities that may tighten precisely when asset values fall. A recent cluster of institutional enquiries revealed that side-pocket assets, delayed settlements, concentrated holders and currency collateral were not combined in one decision view. Fund boards want an architecture that works before a suspension question becomes urgent.

The deliverables are a product-liquidity taxonomy, investor-behaviour model, asset-realisability ladder, funding-capacity map, scenario library, management-action framework, control standard and board pack. The work must distinguish observable market depth from manager judgement; include settlement timing, cash drag, bid impact, concentration, cross-currency collateral, notice queues and facility conditions; and explain how gates, swing pricing, in-kind delivery, borrowing and asset sales distribute cost among remaining and redeeming investors.

Four milestones govern five months: week four accepts the product and data perimeter; week nine validates asset, investor and funding assumptions on representative funds; week fifteen completes reverse stresses and an operating simulation; and week twenty-two accepts the governance architecture, control evidence and implementation backlog. Billing follows acceptance of the four milestones, with local product-law questions explicitly referred to counsel and depositaries.

Acceptance requires portfolio, risk, operations and investor-relations owners to reconcile three stressed funds from redemption notice through final settlement; fund boards must receive decision thresholds, legal dependencies and fairness consequences in usable form; and the simulation must evidence accurate queues, cash, collateral, borrowing availability and communication approvals. One consolidated exception memorandum is due from the sponsor within eight working days of each submission.

The client provides fund documents, dealing records, investor concentration, holdings, transaction evidence, broker observations, valuation methods, facilities, collateral, cash, service-provider agreements, regulatory advice and controlled system access. The consultant does not value assets for reporting, direct trades, approve gates, communicate with investors, issue legal opinions, arrange facilities, set product terms or assume fund-board and designated-person responsibilities.

Why this is external work

Portfolio teams defend investment value, investor relations protects confidence and treasury sees nominal capacity, while boards bear the fairness and continuity decision. Existing metrics were built within those functions and cannot resolve their conflicting clocks. An independent fund-liquidity specialist can test executable actions across the whole chain without managing assets, selling a facility or influencing investors.

What you will own

• Classify each product by redemption promise, notice mechanics, investor concentration, asset realisability, settlement and legal constraints.
• Build investor-behaviour cases covering correlated institutions, intermediated flows, stale notice information and known liquidity events.
• Establish asset ladders using transaction size, market depth, settlement, price impact, encumbrance, valuation uncertainty and operational readiness.
• Test cash, currency collateral, fund borrowing, asset sales, swing mechanisms, gates and in-kind options under reverse stress.
• Define management-action thresholds, evidence owners, fairness analysis, approval boundaries and communication dependencies for fund boards.
• Run the end-to-end simulation from investor request through dealing, funding, trade, settlement, NAV treatment and final payment.
• Deliver product standards, board dashboards, exception rules, control tests, data backlog and accountable implementation sequencing.

Candidate qualifications

• Has designed or independently challenged liquidity-risk frameworks for open-ended funds holding private credit, property or less-liquid securities.
• Understands notice, dealing, settlement, gates, swing pricing, in-kind redemption, borrowing, side pockets and investor-fairness implications.
• Can test asset-realisability assumptions using market evidence without converting uncertain broker colour into guaranteed execution.
• Has modelled concentrated and correlated redemptions alongside collateral, currency, financing and operational settlement constraints.
• Brings direct fund-board, depositary, compliance, valuation and portfolio-management challenge in a regulated European environment.
• Has run an operational liquidity simulation that changed governance, data, product terms or management-action readiness.

Non-negotiables

• Can attend monthly Luxembourg governance weeks and the investor-operations simulation despite otherwise remote delivery.
• Brings open-ended fund-liquidity depth; corporate cash forecasting or closed-end portfolio experience alone is insufficient.
• Will disclose ties to asset managers, distributors, depositaries, lenders, pricing vendors and institutional investors before data access.
• Will not market facilities, solicit investors, direct asset sales or present the consultant’s scenario as a legal determination.

1. 49 words maximum. Which assumption most often makes a less-liquid fund’s asset ladder look more executable than it is?
2. 49 words maximum. How would you test whether fund borrowing remains available during correlated redemptions?
3. 49 words maximum. What operational fact should a board know before considering a gate or suspension?