KYC / AML

KYC/AML are regulatory processes that verify investor identity and prevent money laundering, protecting funds and ensuring compliance.

What Is KYC / AML?

KYC (Know Your Customer) and AML (Anti-Money Laundering) are regulatory processes designed to prevent financial crimes such as money laundering, terrorist financing, and fraud. KYC focuses on verifying the identity of investors and understanding their financial activities, while AML encompasses the broader framework of policies, controls, and monitoring to detect and prevent illicit transactions. Together, these processes are essential for maintaining the integrity of the financial system and ensuring compliance with global and local regulations.

How Does KYC / AML Work?

The KYC process involves collecting and verifying personal and business information from investors, such as name, date of birth, address, and identification documents. This may include enhanced due diligence for higher-risk clients, screening against international sanctions lists, and identifying beneficial owners. AML procedures go further by implementing transaction monitoring systems, ongoing customer reviews, and reporting suspicious activities to authorities. These steps are not just one-time checks, they are continuous processes that help financial institutions and funds detect and address potential risks over time.

Why Are KYC / AML Important for Funds and Investors?

KYC/AML processes are critical because they:

  • Protect funds and investors from being involved in or exposed to financial crime

  • Ensure compliance with legal and regulatory requirements, reducing the risk of fines or sanctions

  • Build trust with allocators, fund managers, and regulators by demonstrating a commitment to transparency and ethical conduct

  • Support operational due diligence and risk management, especially in complex fund structures

Example: KYC / AML in Practice

When onboarding a new allocator, a fund manager collects identification documents, verifies the source of funds, and screens the investor against global sanctions and watchlists. The fund’s custodian oversees these checks, ensures compliance, and monitors ongoing transactions for suspicious activity. If anything unusual is detected, the fund follows internal AML procedures to investigate and, if necessary, report to regulatory authorities.

When Should You Use KYC / AML?

KYC/AML procedures are essential:

  • During the onboarding of new investors, allocators, or managers

  • When conducting operational due diligence or compliance reviews

  • For ongoing monitoring of transactions and client relationships

  • Whenever required by law, regulation, or internal risk management policies

Confluence Group Brand Asset
Confluence Group Brand Asset
Confluence Group Brand Asset
Confluence Group Brand Asset

Find the Right Strategy for You

Answer a few questions and get matched to a strategy based on your goals and risk profile.

Find the Right Strategy for You

Answer a few questions and get matched to a strategy based on your goals and risk profile.

Let’s explore what’s possible, together.

Whether you’re allocating capital or managing it — we’re here to help you move forward with clarity and confidence.

Let’s explore what’s possible, together.

Whether you’re allocating capital or managing it — we’re here to help you move forward with clarity and confidence.

Let’s explore what’s possible, together.

Whether you’re allocating capital or managing it — we’re here to help you move forward with clarity and confidence.

Confluence Group Logo

Curated access to exceptional investment strategies, built on trust and long-term alignment.

© 2022–2025

Confluence Group

Investing in alternative strategies involves risk. Past performance is not indicative of future results. The value of investments can go down as well as up, and you may not get back the amount originally invested. These opportunities are intended for sophisticated or qualified investors who understand the risks involved. Please seek independent financial advice before making any investment decisions.

Confluence Group Brand Assets
Confluence Group Logo

Curated access to exceptional investment strategies, built on trust and long-term alignment.

© 2022–2025

Confluence Group

Investing in alternative strategies involves risk. Past performance is not indicative of future results. The value of investments can go down as well as up, and you may not get back the amount originally invested. These opportunities are intended for sophisticated or qualified investors who understand the risks involved. Please seek independent financial advice before making any investment decisions.

Confluence Group Brand Assets
Confluence Group Logo

Schedule an introductory call