Managing the foreign currency rate changes that can impact returns
Investors who purchase foreign assets run the risk that movement in local currency rates can reduce the underlying value of their expected/projected return. Many investors seeking to reduce such risks are wary of making large upfront cash outlays as well as potential breakage costs. Chatham Financial can help balance these concerns so that the risk is minimized most efficiently.
Benefits of Chatham Foreign Currency Hedging Services
- Holistic approach: Chatham works with private equity investors to define the right strategy and instruments to support it. Our risk analyses help determine what percent of the investment to hedge, as well as the tenor, timing, and instruments needed to offset currency risks. From strategy and execution to reporting, Chatham analyzes and assesses risk exposure as well as structures and reviews policy to identify the best terms of execution.
- Reduced cost: Our proven transparency and comprehensive services help reduce the cost of hedging by ensuring that the right derivative is executed at the right price, on fair terms. Since we are active in the markets every day and have executed over 10,000 transactions worth over $350 billion notional annually, our processes are built so we can arrange credit, negotiate documentation, and execute transactions more efficiently, and cost effectively—either via our competitive auction platform or negotiation—without tying up your own resources.
- Comprehensive execution process: Our timely and efficient trade execution ensure that you are always getting fair market terms— from pre-trade analysis and strategy (including counterparty exposure assessment) to ISDA negotiation and sensitivity analysis for potential future exposures. We also assist with regulatory compliance and securing fair pricing. Plus, we make it easy for clients to gain clarity on where they stand relative to their peers.
- Daily termination valuations: Chatham provides real-time access to counterparty thresholds and valuations to help gauge potential future exposures. Over 35,000 trades are valued nightly and posted to our secure website, giving you 24/7 access to your portfolio from anywhere worldwide.