Foreign exchange volatility can impact an organisation in many ways, from creating near term cash flow and earnings volatility, to influencing competitive position and strategic opportunities over longer time horizons.
Fully understanding the multi-faceted relationship between FX movements, underlying commercial dynamics, and other risk exposures is essential when designing an effective currency risk management programme.
At Validus, our methodology involves a careful quantitative and qualitative analysis of currency exposure, internal business considerations, objectives and constraints to facilitate the design and implementation of a robust risk management strategy. This will often combine internal process changes in combination with a financial hedging programme, to maximise hedging effectiveness whilst minimising hedging costs.
Tactical Hedging Service
Within the context of a structured hedging programme, we provide tailored and proactive currency market analysis to identify tactical hedging opportunities, and we work with clients to regularly calibrate hedging strategies to ensure continued alignment with changing business requirements and market conditions. Our advisory service and interactive technology ensures that underlying FX risk and hedging activity is monitored and reported in an intuitive and actionable format.
“The Validus team understand how private equity thinks about financial risk management issues and they are rigorous in the way they help our portfolio companies to understand and mitigate their risks.”
James Markham, Partner – Portfolio Management, Graphite Capital LLP
FX and Commodity Risk
“Validus provides us with independent strategic advice relating to our long-term currency and commodity risk management program. The people are extremely capable and collaborate very well with our finance and operations teams here at JD Irving.”
Mark Bettle, Director, J.D. Irving Ltd.
“Validus developed a tailored hedging solution to mitigate the risks from our unique combination of existing supplier agreements. The implementation and management of this rolling hedging programme with our FX service providers has been expertly and efficiently handled”.
Mark Goldby, Finance Director, SMS Electronics Ltd.
“Validus worked with us to develop a comprehensive commodity risk management programme – their analysis was both insightful and actionable. We particularly value their independence, and they continue to work alongside our internal team to ensure our commodity price risks are managed effectively”