VIDEO: Chatham Financial Overview
Michael Bontrager of Chatham Financial discusses how our advisory and technology come together to help our clients. A full transcription of the video is available below.
Mike Bontrager: In a world of increasing volatility, the analytics around how much the volatility change could impact your bottom line, that really, really matters. Companies who want to be best in class must be thinking about, “What are impacts of different volatilities in different markets?” The risk management landscape over the last 20 years has just dramatically changed.
Back in the 90s, things were mostly around the economics, structuring to the economics of the trade, and then we had FAS 133, IS 39 that came along, and, all of a sudden, accounting needed to be part of that equation. Then Lehman Brothers goes down, and the credit of the counter party, which was not much of a consideration prior, became a very, very large deal. Now, we’re in an era of Dodd-Frank and Basel III, where regulatory capital and exactly how you’re going to handle your trades, whether to clear them or not. Those issues start to become considerations. The treasury department now is just being cast with worrying about or being concerned with just so many more areas of complexity.
The challenges that companies face are around addressing the issues of how to deal with the complexities that they face. We really believe that companies have to have expertise in any particular area, be it the economic structuring, be it the accounting, be it legal, credit, whatever. They need deep expertise. Secondly, they need a good process around calculating their risk, executing their risk, reporting their risk. And, thirdly, you need tools to actually be able to scale this whole process and make it happen. What Chatham is doing is we are filling in those gaps so that between Chatham and our clients, we are able to cover all 3 of those very important areas.
From the early days, technology has been very important in this company. While many people think of us as an advisory shop, in a way, you could say we’ve always been a technology shop. It has been a critical part of our service to the clients, and what’s happened, especially over the last 10 to 15 years, is as we’ve just invested a lot of money in technology, and, now, we’re moving to a place where we’re making a lot of those tools available.
The way that we’ve approached the market to actually bring technology tools and to also apply our expertise does give our clients so much more flexibility because, to the extent that they really just need the tools and only need a little advice, that works really well, to the extent that they start out needing a little advice but later need a lot of advice, we can fill in those gaps as well.
Chatham is kind of driven really by 3 ideas. The first idea is really around deep expertise. We have deep expertise in the areas where we’ve chosen to pursue, and so we have tremendous experience and expertise because we’ve seen and experienced so many kinds of transactions, and we’re able to bring that expertise to bear for our client.
The second area is really around a partnership mentality. We really want to be viewed by our clients not as a vendor of risk management services but really a partner, a thought partner, thinking with them through the process of, “What should they do?” “How should we do it?” and, “How do we track what you’ve done?” We want to be that partner through that process, which also means that we have a very long-term type of outlook with our client.
The third idea is really around the fact that we think integration of all of these highly complex areas really, really matters. What happens in accounting will affect what happens on the economic side. What happens on the economics will affect the capital. All of these areas of deep expertise really flow together.
And since Chatham is so involved in so many of these different areas from interest rates to foreign exchange to commodities to technology to doing analysis on a portfolio level. Since we’re involved in all of these things, we’re able to bring that all to bear to the specific problems that a client faces.