Viewpoint: LGT Capital Partners

# Business conduct risk in focus: a conversation with Alexander Zanker 

As business conduct risks continue to evolve, asset managers face growing pressure to anticipate issues earlier, break down internal silos, and use data more effectively. We spoke with Alexander Zanker, Head of ESG Analytics at LGT Capital Partners, about how these risks are changing, how LGT Capital Partners integrates business conduct risk monitoring into everyday investment processes, and how he uses RepRisk to support proactive risk management. 

Alexander Zanker: Business conduct risks aren’t necessarily increasing, but they are changing. The most significant growth we see is in cyber- and IT-related risks, including AI-driven threats such as fake news and cyberattacks. 

At the same time, traditional business conduct risks remain firmly in place. Issues like human rights and environmental concerns were already prominent five to ten years ago and continue to be so. These risks are inherent to doing business, particularly in jurisdictions with weaker regulatory oversight. 

AZ: Some risks will always be difficult to predict. That said, firms can be far more proactive by putting structured, data-driven monitoring in place – especially for private market investments. 

Assessing risks by industry, geography, and peer behavior helps identify where business conduct risks are most likely to emerge. At LGT Capital Partners, we use high-quality external data and tools such as RepRisk not only to identify existing cases at the company level, but also to gauge industry-wide vulnerabilities and recurring risk patterns.  

In liquid markets, we use RepRisk to conduct ongoing, high-level assessments and portfolio-level checks across a broad range of business conduct issues, with deeper analysis where needed. In private markets, where incidents tend to be less frequent and less widely reported, monitoring portfolios against news flows ensures relevant developments are identified and assessed in a timely manner.  

The objective is straightforward: understand what monitoring reveals and decide when action is required. In private markets, this may mean engaging with a GP once defined thresholds are reached. Just as importantly, proactive monitoring ensures firms are not caught off guard when stakeholders or clients ask questions. 

AZ: At LGT Capital Partners, risk management has always been positioned close to investment activities. 

Frequent interaction with investment teams helps ensure risks are surfaced early and discussed constructively. Risk is seen as a function that supports investment decision-making, rather than one that simply enforces controls. 

Close collaboration between sustainability and risk teams – well before regulatory requirements such as SFDR – has also been essential for maintaining oversight of portfolio risks and protecting the firm’s reputation. 

AZ: Centralized data governance is highly effective, particularly in smaller teams. With risk and compliance centralized, collaboration is easier and processes are consistent across the organization. 

At LGT Capital Partners, risk checks have long been embedded into standard investment workflows. When new asset classes are introduced, such as private credit, these checks are systematically incorporated into formal assessment processes. 

AZ: We’re taking a conservative approach. At LGT Capital Partners, AI supports data collection and structuring, but it does not replace human judgment. We don’t foresee a strong dependence on AI for final assessments in the near future. 

At LGT Capital Partners, final assessments remain firmly human-led, with clear oversight before any action is taken. AI is a powerful enabler, but it should remain an input, not a decision-maker. 

AZ: Be clear about your objective. Firms need to decide whether business conduct risk management is primarily about protecting reputation or about actively avoiding certain types of exposure. 

That distinction shapes everything else. A clear framework, reliable data, and well-defined processes are essential – but they only add value if firms regularly review whether those processes are actually working as intended.