Risk factors & mitigation
A. Investment risks
Venture Capital Risk (High Impact):
- Portfolio companies may fail; significant permanent capital loss possible
- Mitigation: Diversified portfolio (30+ GPs, 400+ companies across Opportunity + underlying); selection based on top 1.5% managers
Market Risk (High Impact):
- Economic downturn reduces exit valuations and timeline
- Mitigation: Target multiple stages (Series A–C) with different exit horizons; 2–7 year blended exit timing reduces timing concentration
Concentration Risk (Medium Impact):
- Loss of top-performing manager significantly reduces returns
- Mitigation: 15–20 managers per fund; no single manager >10% of Leaders Fund; portfolio diversification
Liquidity Risk (Medium Impact):
- No secondary market; 10–12 year committed capital
- Mitigation: Platform secondary tools; Infra One enables LP trading if desired
Valuation Risk (Medium Impact):
- Mark-to-market losses on illiquid holdings
- Mitigation: Conservative valuation methodology; quarterly mark reviews; use of multiple valuation methodologies
B. Operational risks
Manager Risk (Medium Impact):
- Key personnel departures at Allocator One or underlying GPs
- Mitigation: Experienced management team; institutional structures; incentive alignment (management owns 75% of HoldCo)
Platform Risk (Medium Impact):
- Infra One platform failure or obsolescence
- Mitigation: Proven technology; third-party adoption; independent operations from fund performance
Regulatory Risk (Medium Impact):
- Changes to RAIF/SCSp regulations; tax treatment of distributions
- Mitigation: Diversified fund structures (Germany + Luxembourg); tax advisory; compliance monitoring
C. Structural risks
Fee Stacking Comparison (Low Impact):
- Blended structure eliminates traditional FoF fee drag
- Mitigation: Single 2/20 layer across all vehicles
Alignment Risk (Low Impact):
- Fund managers' incentives may not align with LPs'
- Mitigation: Sponsor co-investment in Leaders Fund; performance-based fees on Infra One