Investment Risks

 

All investments involve risk, including the potential loss of principal. The following outlines the key risks associated with investments managed by MRP Capital Partners. This list is not exhaustive, and investors should carefully consider their own risk tolerance, seek independent advice, and conduct due diligence before making investment decisions.

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General Investment Risks

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• Capital Risk
  The value of investments may fluctuate, and investors may lose all or part of their initial capital. Investment performance is influenced by market conditions, economic factors, and geopolitical events. Past performance is not indicative of future results, and there is no guarantee of positive returns.
   

• Concentration Risk
  Concentration of investments in particular sectors, asset classes, or geographic regions may lead to increased volatility and higher exposure to specific risks. MRP Capital Partners may, in certain circumstances, take concentrated positions in specific opportunities that could impact performance depending on the outcome of those investments.
   

• Credit Risk
  Investments in fixed income, equities, or other credit-related instruments are subject to the risk that the issuer or counterparty may fail to meet its financial obligations. This risk is particularly relevant to lower-rated securities, including high yield bonds, distressed debt, and other non-investment grade instruments, which tend to have higher default probabilities and greater volatility.
   

• Currency Risk
  Investments in assets denominated in foreign currencies are exposed to fluctuations in exchange rates. Currency movements can impact the value of an investment, particularly in non-UK or non-GBP-denominated instruments. This risk is heightened when investing in emerging markets where currency volatility may be more pronounced.
   

• Emerging Markets Risk
  Investments in emerging and frontier markets present additional risks due to political instability, economic volatility, less-developed legal frameworks, and lower market liquidity. These risks are more pronounced in regions such as Sub-Saharan Africa, Latin America, and parts of Asia. Market conditions in these regions can be unpredictable and subject to rapid change.
   

• Interest Rate Risk
  Changes in interest rates can negatively affect the value of fixed income securities, particularly long-duration bonds. Rising interest rates generally lead to a decrease in the market value of existing bonds, with longer-term securities being more sensitive to such changes. This risk also extends to other fixed-income assets and interest-sensitive instruments.
   

• Liquidity Risk
  Investments in illiquid markets or securities can be difficult to sell or may require selling at a discount. In particular, investments in distressed debt, private placements, or less liquid asset classes may experience challenges in executing trades at fair value, especially during periods of market stress or low liquidity.
   

• Leverage Risk
  The use of leverage amplifies both potential gains and losses. Leverage increases the risk of substantial losses in adverse market conditions, as it can magnify the impact of market movements. Margin calls or the forced liquidation of leveraged positions can result in significant losses.
   

• Hedging Risk
  While hedging strategies are employed to mitigate certain market risks, there is no guarantee that these strategies will fully offset losses. Hedging instruments such as derivatives carry risks of their own, including counterparty risk, pricing inaccuracies, or liquidity constraints.
   

• Special Situations & Distressed Debt Risk
  Investments in special situations or distressed debt can be highly speculative and expose investors to significant risk. These investments may face greater price volatility, challenges in valuation, and increased likelihood of default or restructuring. They may also be subject to unique risks related to the company, industry, or geographical location.
   

• Sustainability Risk
  As part of MRP’s investment strategies, ESG (Environmental, Social, Governance) factors are integrated into the decision-making process. Adverse ESG events or failures to meet ESG standards may negatively affect the performance of investments. Sustainability risks are particularly important for investments in emerging markets where environmental and social factors may be less regulated or more volatile.
   

Additional Risk Considerations

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• Market Risk
  Broader market risk is the risk that an entire asset class, or a large portion of the market, may decline in value due to economic, political, or market events. This can affect all types of assets, including equities, fixed income, and commodities. Diversification can help mitigate, but not eliminate, this risk.
   

• Manager Risk
  The success of MRP Capital Partners’ investment strategies depends in part on the skill and expertise of the investment team. If the team’s strategies fail to deliver as expected, or if there is turnover or changes in management, investment performance may be negatively affected.
   

• Geopolitical & Regulatory Risk
  Changes in government policies, regulations, or political events (such as elections, trade wars, or policy shifts) can impact the financial markets, investment conditions, and specific assets or sectors. Investors in international markets, especially emerging markets, should consider the potential impact of geopolitical risks on their investments.
   

• Inflation Risk
  Inflation can erode the purchasing power of fixed income returns and affect the real value of investments. In inflationary environments, the returns from certain assets may not keep pace with rising prices, particularly in the case of fixed income or dividend-paying investments.
   

• Tax Risk
  Changes in tax laws or regulations, whether at the local, national, or international level, may impact the returns on investments. Investors should consider potential tax implications of investments and ensure they are in compliance with all relevant tax laws in their jurisdiction.
   

Disclaimer

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This document is intended for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities, financial products, or investment services. The contents of this disclosure are general in nature and do not consider the specific circumstances of any investor. Investors should conduct their own independent research and consult with professional advisers, including financial, legal, tax, and accounting experts, to assess the suitability of any investment strategy in light of their individual objectives and risk profile.

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MRP Capital Partners is authorised and regulated by the Financial Conduct Authority (FCA), and all investments made pursuant to these strategies are subject to relevant regulations, including MiFID II and other applicable UK financial regulations.

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Governing Law

This disclosure and any associated investment activities are governed by the laws of England and Wales. Disputes relating to these terms shall be subject to the exclusive jurisdiction of the English courts.