# Investment Committee Memo: [Proposal title]

> Decision record for one investment proposal put to an investment
> committee (IC): the decision requested, the thesis, fit with the
> mandate or investment policy statement, valuation and expected return,
> risk and position sizing, diligence findings, ESG and stewardship,
> alternatives, sell discipline, conflicts and compliance sign-off, and
> the minuted vote. It works for any asset class (listed equity, bonds,
> funds, real assets) and for institutional, family-office and
> student-managed funds. Based on common investment governance practice
> and on the US adviser record-keeping rule (17 CFR 275.204-2) and the
> EU MiFID II record-keeping framework, cited by number. Replace every
> `[bracketed]` value and every row marked *Example*. This is a document
> format, not financial, investment, tax, legal or accounting advice;
> obtain the rule, law or policy for the normative text.

<!--
Guidance: How to use this template
- Write one memo per decision: initiate, add, trim, exit, renew or waive
  a limit. The memo is the evidence of a prudent process, so it must be
  readable on its own years later by an auditor, regulator or new
  committee member.
- Fill section 1 (decision requested) and section 4 (mandate fit) first.
  If the proposal does not fit the mandate, the memo is a limit-waiver
  request and must say so in its title.
- Keep the analysis here at summary level and link the full work:
  Equity Research Report (`finance/equity-research-report`), Valuation
  Report (`finance/valuation-report`), Bond Credit Analysis
  (`finance/bond-credit-analysis`), Manager Due Diligence Report
  (`finance/manager-due-diligence-report`).
- Private equity and venture deals have their own deal memo with
  sources and uses, LBO returns and legal terms: Private Equity
  Investment Memo (`finance/private-equity-investment-memo`). Use this
  IC memo as its cover decision record or for any other asset class.
- The worked example is fictional: Kestrel Bay Capital (a fictional
  SEC-registered investment adviser) proposes to initiate a position in
  Halvard Tools (a fictional listed toolmaker) in its Global Equity
  strategy. It is not a recommendation on any real security.
- Conventions in the example: fund currency USD (Global Equity strategy
  NAV USD 1,200m, part of the firm's USD 2,480m regulatory assets under
  management); Halvard Tools is quoted in EUR, so share prices, values
  and returns are in EUR and position sizes are converted at an assumed
  EUR/USD rate of 1.15 *(Example)*. Amounts in millions unless stated,
  prices as of the memo date, returns over a 12-month horizon in EUR
  before currency effects, not annualised unless stated. Halvard figures
  follow the shared fictional example: FY2026 revenue EUR 3,000m, EBITDA
  EUR 450m, net debt EUR 600m including leases, 120m diluted shares,
  price EUR 42.00; scenarios come from the sponsor's Stock Pitch
  (`finance/stock-pitch`).
-->

## Document control

<!-- Guidance: Give each memo a unique ID that the minutes and the order management system can reference. The memo is frozen once the vote is recorded; later changes are new versions with the reason in the revision history. -->

| Field | Value |
|---|---|
| Document ID | [ICM-YYYY-NNN] |
| Proposal title | [Initiate / Add / Trim / Exit / Waiver]: [Instrument or fund] |
| Portfolio, fund or mandate | [Strategy, fund or account name] |
| Asset class | [Listed equity / Fixed income / Fund / Real asset / Other] |
| Proposer (lead analyst or PM) | [@analyst] |
| Sponsor on the committee | [@pm] |
| IC meeting date | YYYY-MM-DD |
| Version | [0.1] |
| Status | [Draft / Submitted / Approved / Approved with conditions / Rejected / Deferred / Withdrawn] |
| Owner | [@cio-office] |
| Approvers/reviewers | [@ic-chair], [@risk], [@compliance] |
| Last updated | YYYY-MM-DD |
| Classification | [Confidential: may contain material non-public information] |
| Record retention | [Per records policy, for example the period required by 17 CFR 275.204-2(e)(1)] |

### Approvals

| Role | Name | Decision | Date |
|---|---|---|---|
| IC chair | [@name] | [Approve / Approve with conditions / Reject / Defer] | YYYY-MM-DD |
| Chief risk officer or risk reviewer | [@name] | [Risk sign-off / Objection] | YYYY-MM-DD |
| Chief compliance officer | [@name] | [Pre-clearance given / Not given] | YYYY-MM-DD |
| IC secretary (minutes) | [@name] | [Minutes recorded] | YYYY-MM-DD |

### Revision history

| Version | Date | Author | Change summary |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@name] | First draft for pre-read |
| 0.2 | YYYY-MM-DD | [@name] | *Example:* Risk comments on liquidity and sector limit addressed |
| 1.0 | YYYY-MM-DD | [@name] | *Example:* Vote recorded, memo frozen |

## Contents

<!-- Guidance: Keep this list aligned with the H2 headings. Committees that use a one-page format can keep sections 1, 2, 6, 11 and 12 and attach the rest as an appendix. -->

1. [Decision requested](#1-decision-requested)
2. [Executive summary](#2-executive-summary)
3. [Investment thesis](#3-investment-thesis)
4. [Fit with mandate and investment policy](#4-fit-with-mandate-and-investment-policy)
5. [Valuation and expected return](#5-valuation-and-expected-return)
6. [Risk analysis and position sizing](#6-risk-analysis-and-position-sizing)
7. [Key diligence findings](#7-key-diligence-findings)
8. [ESG and stewardship](#8-esg-and-stewardship)
9. [Alternatives considered](#9-alternatives-considered)
10. [Exit, sell discipline and monitoring](#10-exit-sell-discipline-and-monitoring)
11. [Conflicts, compliance and record keeping](#11-conflicts-compliance-and-record-keeping)
12. [Committee discussion and decision record](#12-committee-discussion-and-decision-record)
13. [Follow-up and post-decision review](#13-follow-up-and-post-decision-review)
14. [Glossary and references](#14-glossary-and-references)
15. [Standard and licence note](#standard-and-licence-note)

## 1. Decision requested

<!-- Guidance: State the decision in one sentence that could be pasted into the minutes and into the trade instruction. Questions: what action, what size, what limits, by when, under which authority? Pitfall: asking the committee to "note" a proposal; an IC memo asks for a decision. -->

State exactly what the committee is asked to approve. The decision
must be specific enough for the trading desk and for compliance to act
on it without reading the rest of the memo: instrument, direction,
target size, maximum size, execution window and any conditions.

| Field | Value |
|---|---|
| Decision type | [Initiate / Add / Trim / Exit / Renew / Limit waiver] |
| Instrument | [Name, identifier type and identifier] |
| Direction | [Buy / Sell / Subscribe / Redeem] |
| Target weight or amount | [x.x% of NAV / currency amount] |
| Maximum weight or amount | [x.x% of NAV] |
| Execution window | [Number] trading days from approval |
| Authority | [IC terms of reference, section reference; delegated authority level] |
| Conditions proposed | [Conditions, or "None"] |

*Example:* Approve the initiation of a position in Halvard Tools
ordinary shares in the Kestrel Bay Global Equity strategy at a target
weight of 2.0% of NAV (USD 24m on NAV of USD 1,200m), maximum 3.0%,
built over up to 10 trading days with participation capped at 20% of
average daily volume, under the IC terms of reference section 4.2
(new positions above 1.0% of NAV require IC approval). The sponsor's
stock pitch proposed 4%; the size was reduced to 2.0% after the risk
review of the bear case and the upside/downside ratio (section 5).

## 2. Executive summary

<!-- Guidance: Write this last, in no more than one screen. A committee member who reads only this section must know the recommendation, the reason, the expected return, the main risk and the size. Pitfall: restating the company description instead of the argument. -->

Summarise the proposal in five to eight sentences. Cover the
recommendation, the core reason the market is mispricing the asset or
the reason the asset belongs in the portfolio, the expected return with
its range, the main risk and how the size limits it, and any open
conditions.

| Item | Summary |
|---|---|
| Recommendation | [Approve / Approve with conditions] |
| Thesis in one line | [Statement] |
| Expected return (horizon) | [x%] over [12 months] |
| Downside case | [x%] |
| Proposed size and risk contribution | [x% of NAV; ex-ante tracking error change] |
| Key risk | [Risk and mitigant] |
| Open items | [Items, or "None"] |

*Example:* Halvard Tools is a fictional listed maker of professional
power tools whose margin recovery is under-priced because the market
extrapolates a two-year dealer destocking cycle and a margin trough.
The probability-weighted 12-month expected total return is 19.5% in EUR
(price 17.3%, dividend 2.3%) against a bear case of minus 28.6% before
dividend. A 2.0% position raises the strategy's ex-ante tracking error
from 3.10% to 3.25%, inside the 4.0% budget. The main risk is a second
year of channel destocking; the stop-review trigger in section 10
limits it. The base-to-bear ratio is below 1 (0.83), so the case rests
on the probability-weighted return rather than on a skewed payoff, and
the size reflects that.

## 3. Investment thesis

<!-- Guidance: List two to four thesis points, each falsifiable and each with the evidence and the signpost that would prove it wrong. Questions: what does the market believe, what do we believe, why will the gap close and when? Pitfall: a thesis that is a description ("market leader") rather than a view that differs from consensus. -->

Describe the variant view: what consensus expects, what the team
expects, why the difference exists and which catalyst will close it.
Each thesis point needs evidence and a measurable signpost that will
be monitored in section 10.

| ID | Thesis point | Evidence | Signpost that would falsify it | Expected timing |
|---|---|---|---|---|
| TH-001 *(Example)* | Destocking is over; sell-out has exceeded sell-in for four quarters | Distributor inventory surveys; company commentary on channel weeks | Channel inventory weeks rise for two consecutive quarters | Next two quarterly reports |
| TH-002 *(Example)* | EBITDA margin recovers from 15.0% (FY2026) to 17.0% by FY2028 on price and the closure of two of nine plants | Closures approved by the board; price-cost spread positive in the last two quarters | Gross margin below the FY2026 level in any quarter of 2027 | 12 to 24 months |
| TH-003 *(Example)* | Capital returns step up as net leverage, already 1.3x, falls toward 1.0x | Board leverage target of 1.0x to 2.0x; bank loans due 2028 repaid from cash | Large debt-funded acquisition | 12 months |
| [TH-NNN] | [Point] | [Evidence] | [Signpost] | [Timing] |

Add a short narrative under the table covering the business model, the
competitive position and the reason the opportunity exists now. Keep the
full company analysis in the research report and link it here.

## 4. Fit with mandate and investment policy

<!-- Guidance: Test the proposal against every binding constraint in the governing document before discussing return. Questions: is the instrument eligible, does the trade stay inside every limit after execution, does it fit the client's or fund's objectives? Pitfall: checking limits on the current portfolio rather than the pro forma portfolio after the trade. -->

Test the proposal against the governing document: the investment
policy statement (see Investment Policy Statement for Institutional
Investors, `finance/investment-policy-statement-institutional`), the
fund prospectus or offering memorandum, the investment management
agreement or the student fund's charter. Use pro forma figures (after
the trade at maximum size).

| Constraint | Source (document, section) | Limit | Current | Pro forma at maximum size | Result |
|---|---|---|---|---|---|
| Eligible asset class *(Example)* | IMA schedule 1 | Listed equity in developed markets | n/a | Eligible | Pass |
| Single issuer weight *(Example)* | IMA schedule 2 | 5.0% of NAV | 0.0% | 3.0% | Pass |
| Sector weight (industrials) *(Example)* | IMA schedule 2 | 20.0% of NAV | 14.5% | 17.5% | Pass |
| Active sector weight vs benchmark *(Example)* | Risk policy 3.1 | Plus or minus 8.0 points | +3.0 | +6.0 | Pass |
| Liquidity (days to liquidate at 20% ADV) *(Example)* | Risk policy 5.2 | 10 days | n/a | 8 days | Pass |
| Exclusion list *(Example)* | Responsible investment policy 2.3 | Not on list | n/a | Not on list | Pass |
| [Constraint] | [Source] | [Limit] | [Current] | [Pro forma] | [Pass / Fail / Waiver requested] |

Explain how the investment contributes to the portfolio objective
(return target, income, diversification or liability hedge) and state
whether it substitutes for an existing holding. For individual client
mandates, the suitability evidence lives in the client file; refer to
it rather than repeating personal data here.

## 5. Valuation and expected return

<!-- Guidance: Show a probability-weighted expected return from explicit scenarios, not a single target price. Questions: which methods, what key assumptions, what is priced in today, what is the asymmetry? Pitfall: scenario probabilities that do not sum to 100% or a bear case that is only slightly below the current price. -->

Summarise the valuation methods used (for example discounted cash
flow, trading multiples, sum of the parts, yield or spread analysis for
credit, net asset value for funds) and the key assumptions behind each.
The detailed work belongs in the Valuation Report
(`finance/valuation-report`) or the Comparable Companies Analysis
(`finance/comparable-companies-analysis`).

Expected return is the probability-weighted sum of scenario returns:

$$
E[R] = \sum_{i=1}^{n} p_i R_i, \qquad \sum_{i=1}^{n} p_i = 1
$$

The upside/downside ratio (a reward-to-risk ratio, not the capture
ratios used to compare a manager with a benchmark) compares the
base-case gain with the bear-case loss:

$$
\text{Upside/downside ratio} = \frac{P_{\text{base}} - P_0}{P_0 - P_{\text{bear}}}
$$

| Scenario | Key assumptions | Value per share (EUR) | Price return vs EUR 42.00 | Probability | Weighted value (EUR) |
|---|---|---|---|---|---|
| Bull *(Example)* | FY2028E revenue EUR 3,450m, margin 18%, 13x FY2028E EBITDA, net debt EUR 480m | 63.00 | +50.0% | 25% | 15.75 |
| Base *(Example)* | FY2028E revenue EUR 3,300m, margin 17%, 12x FY2028E EBITDA (peer median NTM 11.5x), net debt EUR 480m | 52.00 | +23.8% | 50% | 26.00 |
| Bear *(Example)* | Second destocking year, revenue EUR 2,850m, margin 13%, 11x EBITDA, net debt EUR 520m | 30.00 | minus 28.6% | 25% | 7.50 |
| Probability-weighted | | | +17.3% | 100% | 49.25 |

*Example check:* 0.25 x 63 + 0.50 x 52 + 0.25 x 30 = 49.25; 49.25 / 42.00
minus 1 = 17.3%. Adding the expected dividend of EUR 0.95 (the 2027E dividend per share
in the equity research report, 2.3% of the price) gives a 12-month
expected total return of 19.5% in EUR.
Upside/downside ratio: (52 minus 42) / (42 minus 30) = 0.83; measured
from bull to bear it is 21 / 12 = 1.75. The base value per share is
(3,300 x 17% x 12 minus 480) / 120 = EUR 52.10, rounded to EUR 52.
The sell-side research on the same company (`finance/equity-research-report`)
has a Hold rating with a target of EUR 44.70; record why the team
disagrees (here, the 12x multiple on FY2028E EBITDA: the house DCF of
EUR 39.30 in `finance/valuation-report` uses a similar operating forecast) and treat the
gap as a risk to the timing of the thesis.

State what the current price implies (reverse valuation): for the
example, EUR 42.00 with 120m shares and net debt of EUR 600m gives an
enterprise value of EUR 5,640m, or 12.5x FY2026 EBITDA of EUR 450m and
10.9x the consensus-style FY2027E EBITDA of EUR 519.8m, close to the
peer median of 11.5x NTM. The market already prices a partial recovery;
the variant view is about FY2028, when the base case puts EBITDA at
EUR 561m (10.1x at today's enterprise value). Record the hurdle the committee applies
(for example expected total return above the strategy's benchmark
expected return plus a margin) and whether the proposal clears it.

## 6. Risk analysis and position sizing

<!-- Guidance: Size the position from risk, liquidity and conviction, then show the effect on portfolio-level risk. Questions: what is the loss in the bear case in currency, how long would exit take, how much tracking error or volatility does it add? Pitfall: sizing by conviction alone, with no liquidity or correlation check. -->

### 6.1 Risk register for the proposal

| ID | Risk | Likelihood | Impact | Mitigant | Owner |
|---|---|---|---|---|---|
| RSK-001 *(Example)* | Second year of channel destocking | Medium | High | Size at 2.0%, stop-review trigger at minus 15% relative | [@analyst] |
| RSK-002 *(Example)* | Raw material cost spike (steel, copper) | Medium | Medium | Monitor price-cost spread quarterly | [@analyst] |
| RSK-003 *(Example)* | Debt-funded acquisition dilutes thesis | Low | Medium | Thesis signpost TH-003; engage with board | [@pm] |
| RSK-004 *(Example)* | EUR weakens against USD; the holding is EUR-denominated and the strategy is unhedged | Medium | Low | Accept; currency is managed at portfolio level by mandate | [@pm] |
| [RSK-NNN] | [Risk] | [Low / Medium / High] | [Low / Medium / High] | [Mitigant] | [@owner] |

### 6.2 Position sizing

Explain the sizing logic. Common inputs are the bear-case loss as a
share of NAV, the marginal contribution to tracking error or volatility,
correlation with existing holdings and liquidity.

Days to build or liquidate a position:

$$
D = \frac{Q}{\pi \times \text{ADV}}
$$

where $Q$ is the position in shares, $\pi$ the maximum participation
rate and ADV the average daily volume in shares.

| Measure | Value | Limit or budget | Comment |
|---|---|---|---|
| Position at target *(Example)* | USD 24.0m = EUR 20.9m at 1.15, about 0.50m shares at EUR 42.00 | 5.0% issuer limit | 2.0% of NAV |
| Bear-case loss at target *(Example)* | USD 6.9m (28.6% of USD 24.0m) | 0.75% of NAV per idea | 0.57% of NAV, inside |
| Days to build at 20% of ADV of 0.5m shares *(Example)* | 0.50m / (0.20 x 0.5m) = 5 days | 10 days | Inside |
| Days to liquidate at maximum size *(Example)* | USD 36.0m = 0.75m shares; 0.75m / 0.1m = 7.5, so 8 days | 10 days | Inside |
| Ex-ante tracking error *(Example)* | 3.10% to 3.25% | 4.0% | Inside |
| Correlation with largest industrial holding *(Example)* | 0.62 | Review above 0.80 | Acceptable |

### 6.3 Stress and scenario results

Show the portfolio effect of the relevant stresses (equity market
fall, rate shock, sector shock, currency move) with and without the
position. Name the risk model and its version so the numbers can be
reproduced. Where a model is material, its governance follows the
firm's model risk policy.

*Example:* in the risk model's European equity market fall of 20%,
the strategy loses 19.2% without the position and 19.3% with it,
because Halvard's beta of 1.10 is close to the portfolio's. A sector
shock to industrials of minus 15% adds 0.5 points of relative loss at
the maximum size. A 10% fall in EUR against USD costs about 0.2% of
NAV at the target size before any offsetting exposure elsewhere in the
portfolio. State which of these results the committee should weigh
most and why; for a cyclical single stock it is usually the sector
shock, not the market fall.

## 7. Key diligence findings

<!-- Guidance: Report what the team did and what it found, including findings that weaken the case. Questions: which sources, which meetings, which red flags, what remains unverified? Pitfall: listing only confirming evidence. -->

Summarise the diligence performed and its results. For listed
securities this usually covers filings and accounts, management and
investor relations meetings, channel checks, expert calls (through an
approved expert network, with compliance controls on material
non-public information), and accounting quality review. For funds,
link the Manager Due Diligence Report
(`finance/manager-due-diligence-report`).

| ID | Area | Work performed | Finding | Effect on thesis |
|---|---|---|---|---|
| DD-001 *(Example)* | Accounting quality | Three-year review of accruals, capitalised development and revenue cut-off | Accruals ratio stable; no change in revenue policy | Neutral |
| DD-002 *(Example)* | Channel | Interviews with eight distributors in four countries | Inventory back to seasonal norm in six of eight | Supports TH-001 |
| DD-003 *(Example)* | Management | Meeting with CFO and head of operations | Plant consolidation on schedule; savings target reiterated | Supports TH-002 |
| DD-004 *(Example)* | Governance | Board and remuneration review | Incentives weighted to revenue growth, not returns | Engagement topic (section 8) |
| [DD-NNN] | [Area] | [Work] | [Finding] | [Supports / Weakens / Neutral] |

List items not yet verified and how they will be closed. An open item
that could change the decision should become a condition in section 12.

Report diligence that weakens the case with the same weight as
diligence that supports it. In the example, two of eight distributors
still report inventory above the seasonal norm, and the sell-side
analyst covering the stock rates it Hold; both belong in the memo,
because a committee that sees only confirming evidence cannot judge
the probability it is asked to accept.

## 8. ESG and stewardship

<!-- Guidance: Cover only financially material sustainability factors and any binding policy constraint. Questions: which factors affect the thesis, does the firm's responsible investment policy restrict or require anything, what will the firm engage on? Pitfall: a generic ESG score without a link to value or to policy. -->

Identify the sustainability factors that are financially material for
this asset and how they affect the thesis or valuation. Confirm the
proposal against the firm's Responsible Investment Policy
(`finance/responsible-investment-policy`) and, where relevant, the
product's sustainability disclosures (for example an EU fund's
pre-contractual disclosures under the SFDR as currently in force).

| Factor | Materiality | Evidence | Treatment | Engagement objective |
|---|---|---|---|---|
| Product safety *(Example)* | High | Recall history clean for five years | No valuation adjustment | None |
| Remuneration alignment *(Example)* | Medium | DD-004: incentives favour revenue growth | No adjustment | Ask for a return-on-capital metric in the long-term plan |
| Energy use in plants *(Example)* | Medium | Plant consolidation cuts energy intensity | Included in margin case | Ask for a dated reduction target |
| [Factor] | [Low / Medium / High] | [Evidence] | [Valuation / Sizing / None] | [Objective] |

State the voting and engagement approach for the holding and refer to
the Stewardship Report (`finance/stewardship-report`) where outcomes
are reported.

## 9. Alternatives considered

<!-- Guidance: Show the opportunity cost. Questions: what else could fill this risk budget, why is this better, what is the funding source? Pitfall: no funding source, so the memo silently raises cash drag or gross exposure. -->

List the alternatives the team considered and why this proposal is
preferred. Include "do nothing" and the funding source (cash, trim of a
named holding, or a reduction in a sector overweight).

| Alternative | Expected return | Risk | Why not chosen |
|---|---|---|---|
| Do nothing *(Example)* | Benchmark return on the 2.0% | None added | Forgoes a positive expected excess return within budget |
| Add to existing industrial holding *(Example)* | 12% | Raises single-name concentration to 4.8% | Lower expected return and concentration near limit |
| Sector exchange-traded fund *(Example)* | Sector return | Lower stock-specific risk | No variant view expressed |
| [Alternative] | [x%] | [Risk] | [Reason] |

Funding source *(Example)*: trim the cash buffer from 3.0% to 1.0% of
NAV, within the 0.5% minimum cash rule.

## 10. Exit, sell discipline and monitoring

<!-- Guidance: Decide now what will make the team sell or come back to the committee. Questions: what price or event triggers a review, what KPIs are tracked, who monitors and how often? Pitfall: a sell discipline that only says "when the target is reached". -->

Set the exit rules and the monitoring plan before the trade. Triggers
should prompt a documented review, not an automatic sale, unless the
mandate requires automatic action.

| ID | Trigger | Threshold | Action | Owner |
|---|---|---|---|---|
| EXT-001 *(Example)* | Price reaches base-case value | EUR 52.00 | Review: trim to 1.0% unless thesis upgraded | [@pm] |
| EXT-002 *(Example)* | Relative underperformance | Minus 15% vs benchmark from entry | Stop-review memo to IC within 10 trading days | [@analyst] |
| EXT-003 *(Example)* | Thesis signpost broken | Any falsifier in section 3 | Re-underwrite or exit | [@analyst] |
| EXT-004 *(Example)* | Limit breach after market move | Issuer weight above 5.0% | Rebalance per risk policy | [@risk] |
| [EXT-NNN] | [Trigger] | [Threshold] | [Action] | [@owner] |

Monitoring KPIs and cadence: list the operating and market indicators
(for the example: channel inventory weeks, gross margin, price-cost
spread, net leverage) with the review frequency and the forum where
they are reported.

## 11. Conflicts, compliance and record keeping

<!-- Guidance: Show that conflicts were identified and managed and that compliance cleared the trade before the vote. Questions: does any member, employee or affiliate hold, advise or lend to the issuer; is the issuer on a restricted or watch list; was any information received under a wall-crossing? Pitfall: recording the conflict but letting the conflicted member vote. -->

Record the conflicts check and the compliance pre-clearance. Refer to
the firm's Conflicts of Interest Register
(`compliance/conflicts-of-interest-register`) and its code of ethics
and personal trading rules (Investment Adviser Code of Ethics,
`compliance/investment-adviser-code-of-ethics`).

| Check | Result | Evidence |
|---|---|---|
| Restricted and watch lists *(Example)* | Not listed | List extract dated YYYY-MM-DD |
| Material non-public information *(Example)* | None received; expert calls through approved network with compliance chaperone | Expert network log |
| Personal holdings of IC members *(Example)* | One member holds shares personally | Disclosure dated YYYY-MM-DD; member recused (section 12) |
| Affiliate relationships *(Example)* | None (no lending, advisory or underwriting relationship) | Affiliate check |
| Cross-trades or allocation issues *(Example)* | Allocation pro rata across accounts in the strategy | Allocation policy reference |
| [Check] | [Result] | [Evidence] |

### 11.1 Regulatory record-keeping references (as of 2026-10; check local law)

| Jurisdiction | Reference | What it means for this memo |
|---|---|---|
| United States (registered advisers) | 17 CFR 275.204-2(a)(7): written communications relating to recommendations and advice; 275.204-2(e)(1): retention period | Keep the memo, pre-read material and minutes as books and records |
| United States (registered advisers) | Investment Advisers Act section 204A (15 U.S.C. 80b-4a): policies to prevent misuse of material non-public information | Evidence the MNPI check above |
| United States (registered advisers) | 17 CFR 275.206(4)-7: written compliance policies, annual review, chief compliance officer | IC process is one of the reviewed procedures |
| European Union (investment firms) | MiFID II (Directive 2014/65/EU) Art. 16(6) and Delegated Regulation (EU) 2017/565 Art. 72 to 76 (record keeping) | Keep records sufficient for the supervisor to monitor compliance |
| European Union (fund managers) | AIFMD (Directive 2011/61/EU) Art. 14 (conflicts of interest) and Art. 15 (risk management), as amended by Directive (EU) 2024/927; check the national transposition | Conflicts and risk sign-off before investment |
| [Jurisdiction] | [Reference] | [Meaning] |

## 12. Committee discussion and decision record

<!-- Guidance: The secretary completes this section during or straight after the meeting. Record attendance, quorum, recusals, the main challenges and answers, the vote by member and any conditions. Pitfall: minutes that show only the outcome, which cannot evidence that the committee challenged the proposal. -->

### 12.1 Attendance and quorum

| Member | Role | Present | Voting | Recused (reason) |
|---|---|---|---|---|
| [@member-1] *(Example)* | Chief investment officer, chair | Yes | Yes | No |
| [@member-2] *(Example)* | Head of global equity | Yes | Yes | No |
| [@member-3] *(Example)* | Portfolio manager, sponsor | Yes | Yes | No |
| [@member-4] *(Example)* | Chief risk officer | Yes | Yes | No |
| [@member-5] *(Example)* | Senior analyst | Yes | Yes | No |
| [@member-6] *(Example)* | Portfolio manager, income | Yes | No | Yes (personal holding, section 11) |

*Example:* quorum under the terms of reference is four voting members
including the chair or a deputy. Five eligible voting members were
present after one recusal; quorum met.

### 12.2 Discussion summary

Record each material challenge, the answer and whether it changed the
proposal.

| ID | Question or challenge | Raised by | Response | Outcome |
|---|---|---|---|---|
| ICQ-001 *(Example)* | Is the bear case severe enough given the last cycle? | [@member-4] | Last cycle trough EBITDA margin was 12%; bear uses 13%. Indicative re-run at 12%: (2,850 x 12% x 11 minus 520) / 120 = EUR 27.02, minus 35.7%, a loss at target of USD 8.6m or 0.71% of NAV, still inside the 0.75% budget | Condition C-1 added |
| ICQ-002 *(Example)* | Why not wait for the next quarterly report? | [@member-1] | Expected return is higher before the catalyst; size limits the downside | Accepted |
| [ICQ-NNN] | [Question] | [@member] | [Response] | [Outcome] |

### 12.3 Vote and decision

| Member | Vote | Comment |
|---|---|---|
| [@member-1] *(Example)* | For | |
| [@member-2] *(Example)* | For | |
| [@member-3] *(Example)* | For | |
| [@member-4] *(Example)* | Against | Prefers 1.0% until next quarterly report |
| [@member-5] *(Example)* | For | |

| Field | Value |
|---|---|
| Result | *Example:* Approved with conditions, 4 for, 1 against, 0 abstentions, 1 recusal |
| Approved size | *Example:* Target 2.0%, maximum 3.0% of NAV |
| Conditions | *Example:* C-1: re-run the bear case at a 12% margin in the full model and circulate before trading begins; C-2: stop-review at minus 15% relative |
| Effective from | YYYY-MM-DD |
| Expiry of approval if not executed | *Example:* 20 trading days |
| Dissent recorded | *Example:* Yes, member-4 (see comment) |

## 13. Follow-up and post-decision review

<!-- Guidance: Close the loop. Questions: were the conditions met, was the trade executed as approved, what happened against the thesis? Pitfall: never reviewing past decisions, so the committee cannot learn from its hit rate. -->

Track the conditions and the execution, then schedule a post-decision
review at a fixed date (for example 12 months after approval or on
exit). The review compares outcomes with the thesis points and
scenarios, separates process quality from outcome, and feeds the
committee's annual review of its decision record.

Common errors to avoid in the whole memo: a decision sentence that the
trading desk cannot execute without asking questions; limits tested on
the current portfolio rather than pro forma; scenarios whose
probabilities do not sum to 100% or whose bear case is barely below
the price; returns quoted in the security's currency without saying
whether currency risk is hedged; and minutes that record a unanimous
vote with no question asked. Each of these weakens the memo as
evidence of a prudent process, which is its main purpose.

| ID | Action | Owner | Due | Status |
|---|---|---|---|---|
| ACT-001 *(Example)* | Close condition C-1 and circulate | [@analyst] | YYYY-MM-DD | [Open / Closed] |
| ACT-002 *(Example)* | Confirm execution within window and limits | [@trading] | YYYY-MM-DD | [Open / Closed] |
| ACT-003 *(Example)* | Post-decision review against TH-001 to TH-003 | [@pm] | YYYY-MM-DD | [Open / Closed] |
| [ACT-NNN] | [Action] | [@owner] | YYYY-MM-DD | [Status] |

```mermaid
flowchart LR
  A["Idea and research"] --> B["Draft memo and pre-read"]
  B --> C["Risk and compliance review"]
  C --> D["IC meeting and vote"]
  D -->|Approved| E["Execution within window"]
  D -->|Deferred or rejected| B
  E --> F["Monitoring and triggers"]
  F -->|Trigger hit| G["Stop-review memo"]
  G --> D
  F --> H["Post-decision review"]
```

### 13.1 Variants by asset class and investor type

| Variant | What changes in this template |
|---|---|
| Fixed income | Replace section 5 scenarios with spread, default and recovery scenarios; link Bond Credit Analysis (`finance/bond-credit-analysis`) |
| Fund or manager selection | Section 7 becomes investment and operational due diligence; link Manager Due Diligence Report (`finance/manager-due-diligence-report`) |
| Private equity or venture | Use Private Equity Investment Memo (`finance/private-equity-investment-memo`) for the deal analysis; keep sections 1, 11 and 12 here as the decision record |
| Student-managed fund | Use a short form: sections 1 to 6, 10 and 12, with the faculty adviser as a non-voting reviewer; link Stock Pitch (`finance/stock-pitch`) |
| Individual client mandate | Suitability evidence stays in the client file; see Client Risk Profile (`finance/client-risk-profile`) |

## 14. Glossary and references

<!-- Guidance: Define every abbreviation used in the memo and list the documents relied on with their dates. -->

### 14.1 Glossary

| Term | Meaning |
|---|---|
| IC | Investment committee: the body with delegated authority to approve investment decisions |
| NAV | Net asset value of the portfolio or fund |
| ADV | Average daily trading volume, usually over 20 or 60 trading days |
| Tracking error | Standard deviation of the difference between portfolio and benchmark returns |
| Variant view | The specific way the team's expectation differs from market consensus |
| MNPI | Material non-public information |
| Recusal | A member stepping out of discussion and vote because of a conflict |
| Stop-review | A mandatory documented review when a loss or event threshold is hit |
| Pro forma | Figures recalculated as if the proposed trade had been executed |

### 14.2 References

| Reference | Version or date checked | Use |
|---|---|---|
| 17 CFR 275.204-2, Books and records to be maintained by investment advisers, ecfr.gov | Current text checked 2026-10-25 | Record-keeping of recommendations and retention |
| 17 CFR 275.206(4)-7, Compliance procedures and practices, ecfr.gov | Current text checked 2026-10-25 | Compliance programme context |
| Investment Advisers Act of 1940 section 204A (15 U.S.C. 80b-4a), govinfo.gov | Checked 2026-10-25 | MNPI policies |
| Directive 2014/65/EU (MiFID II) and Delegated Regulation (EU) 2017/565, eur-lex.europa.eu | Consolidated texts, check current version | EU record keeping and conflicts |
| Directive 2011/61/EU (AIFMD), as amended by Directive (EU) 2024/927, eur-lex.europa.eu | Consolidated text, check current version and national transposition | Conflicts, risk management |
| [Firm IC terms of reference] | [Version] | Authority, quorum, voting |
| [Governing investment policy or IMA] | [Version] | Limits in section 4 |

## Standard and licence note

Based on common investment governance practice and on public law cited
by number: the US Investment Advisers Act of 1940 and SEC rules in
17 CFR Part 275 (US government works), and EU legislation on EUR-Lex
(reuse authorised with acknowledgement of the source). No rule text is
reproduced; obligations are summarised in original words. No
professional body's curriculum, code or template is used. Halvard Tools
and Kestrel Bay Capital are fictional, and nothing here is a
recommendation on any security. This template is original text written
for this collection; check the current official versions of the cited
rules before use. Template licence: MIT.