Risk Appetite Statement
The level and types of risk MajorWave accepts in pursuit of its strategic objectives, including leverage, concentration, counterparty, and liquidity limits, with veto rights held by an independent Chief Risk Officer.
- Policy Owner
- Chief Risk Officer
- Approving Body
- Board of Directors
- Effective Date
- January 1, 2026
- Last Reviewed
- June 1, 2026
- Next Review
- January 1, 2027
- Version
- 1.0
Purpose
The Risk Appetite Statement defines the level and types of risk MajorWave is willing to accept in pursuit of its strategic objectives. The Statement reflects the firm's commitment to durable capital, conservative leverage, real collateral, and transparent governance, and serves as a binding constraint on investment, financing, and operating decisions across the platform.
Risk Philosophy
The firm seeks to compound durable capital across self-storage real estate, adjacent storage businesses, storage-vertical technology, and storage-real-estate credit through long-duration ownership of high-quality assets. The firm underwrites without reliance on rate cuts, refinancing markets, or narrative multiple expansion, and treats leverage as a source of fragility to be minimized in the base case.
Strategic Risks
The firm accepts calibrated exposure to strategic risks that arise from its stated mandate, including real-estate cycles, storage-sector supply cycles, tenant-mix concentration by geography, and technology adoption cycles. Strategic risks are managed by portfolio construction, sector-specialist diligence, cross-fund coordination, and the operational integration of every portfolio position.
Financial Risks
The firm limits financial risk exposures within board-approved thresholds, including: fund-level portfolio leverage; single-position leverage; asset-liability duration mismatch; foreign-currency exposure; counterparty and lender concentration; interest-rate hedging coverage; and liquidity coverage relative to funded commitments. Leverage is calibrated on a base-case NOI that is stress-tested against occupancy, ECRI, and expense-inflation scenarios.
Operational Risks
The firm maintains operational-risk exposures within tolerances covering key-person concentration, single-vendor concentration, business-continuity capacity, cybersecurity posture, portfolio-company controls, valuation controls, and fund-administration controls. Operational risk tolerances are reviewed and re-approved annually.
Compliance and Regulatory Risks
The firm has no appetite for willful non-compliance with law, regulation, or its own governance framework. Compliance risks are managed through independent Compliance oversight, mandatory training, periodic testing, and independent internal audit.
Reputational and Stewardship Risks
The firm treats reputation and stewardship as compounding assets whose impairment is costly and often irreversible. Reputational risk is managed through disciplined tenant-facing practices, transparent LP reporting, disciplined communications, and the exercise of restraint in transactions that present outsized reputational exposure.
Veto Rights
The Chief Risk Officer holds veto rights on any investment or financing decision that would breach the concentration, counterparty, leverage, or liquidity thresholds set out in this Statement. Veto decisions are reported to the Investment Committee and, in the event of override, to the Board of Directors.
Monitoring and Reporting
The Chief Risk Officer reports on quantitative risk exposures against the thresholds in this Statement to the Investment Committee monthly and to the Board of Directors quarterly. Threshold breaches trigger mandatory escalation, remediation, and, where required, LP disclosure.
Review
This Statement is reviewed and re-approved by the Board of Directors annually or upon any material change to the firm's strategy, capital base, or regulatory environment.