Private Equity

Chatham understands the attributes which characterize the hedging philosophy of Private Equity firms at the portfolio company and fund levels. Whether working with multiple sponsors in the context of a club deal or working with a portfolio company CFO, Chatham’s team of experts will help your organization tailor a strategy that meets your needs and requirements.

We begin the process by fully identifying a transaction’s interest rate and currency risk, taking into consideration pro-forma cash flows, probability-based rate sensitivity analyses, projected investment horizons, and IRR objectives.

Chatham ensures hedges will meet FAS 133 or IAS 39 hedge accounting requirements, if appropriate. This issue is very important to address early in any transaction to avoid accounting treatments which could create volatile earnings that impact future valuations as part of an IPO exit strategy.

At a macro level, we work closely with fund clients and their portfolio company CFOs in developing and implementing fund-level risk management tools. Included in this portfolio-level service is a full range of web-based reporting tools which allow a financial officer to control and manage risk exposures, FAS 133 & IAS 39 accounting, payments, collateral and transaction documentation.

Our clients have strong internal capital markets expertise. However, these firms choose to partner with us because of our high economic impact and because we free them to focus on other important aspects of the overall transaction.

Services Offered

Interest Rate Hedging
Chatham helps clients determine and execute the right interest rate hedging strategy and tools. Whether it’s with interest rate swaps, caps, collars, treasury locks, or a wide range of other risk management solutions, we partner with our clients to address a wide range of interest rate risks. Learn More

Foreign Currency Hedging
Chatham helps clients determine and execute the right currency hedging strategy and tools. Whether with foreign currency forward contracts, options, collars, cross currency swaps, or a wide range of other risk management solutions, we partner with our clients to address a wide range of currency risks. Learn More

Accounting Services
Chatham serves hundreds of companies worldwide achieve their hedge accounting objectives. With years of experience and deep expertise our dedicated team of accounting professionals consult on and account for thousands of hedging relationships for derivatives, bringing peace of mind to our clients and their auditors. Learn More

Hedge Portfolio Management
Chatham’s hedge advisory expertise is complemented by our online hedge portfolio system allowing clients to keep their hedging information in a secure, password protected “electronic filing cabinet”, easing the burden of organizing and accessing hedging data. Learn More

Debt Management
Whether providing our clients a clear view of their debt profile from individual loan details and valuations to portfolio level reporting and analytics, FMS, Chatham’s debt management system enables clients to access their debt and derivative documentation through one user-friendly interface. Learn More

Valuations
Over 1000 clients with operations around the globe rely on Chatham to provide accurate and independent valuation services for their debt and derivative holdings. Every night we value more than 20,000 trades representing dozens of different indices and multiple currencies. Learn More

“Whether helping Carlyle think about our currency exposures at the fund level or working with one of our portfolio company CFO’s to hedge interest rate risk, Chatham has been an invaluable member of the Carlyle team.”

— John Harris, Senior Advisor, The Caryle Group

Case Studies

Emerging Markets
Learn how Chatham Financial helped a large private equity firm evaluate the risks of making an acquisition in an emerging market by looking at the most cost-effective hedging strategy, likely local currency drivers, and their maximum exposure should their equity become unhedged. Learn More

Currency Challenges
Learn how Chatham Financial helped a large private equity firm with executing an acquisition in a developed economy, and determine the best way to address the currency mismatch between cash flows and debt service. Learn More

Add-on Acquisition
Learn how Chatham Financial assisted a large private equity firm with an add-on acquisition for one of its portfolio companies by helping them understand their hedging alternatives in the context of future IPO opportunities. Learn More