The effective management of interest rate risk requires an analysis of the overall capital structure and debt profile of the business, and a determination of the optimal fixed / floating debt mix.
Hedging instruments are used to calibrate the exposure profile to ensure that it:
Matches underlying commercial dynamics; and
Meets the requirements of the bank or lending syndicate.
As an independent advisor and hedging co-ordinator, Validus ensures that hedging strategies are designed and executed to suit the objectives of our clients, and that full price transparency and efficient hedge execution is achieved for all hedging transactions.
Following the selection of an appropriate hedging instrument or portfolio, Validus will negotiate documentation, and arrange and co-ordinate the transaction via competitive auction or direct negotiation.
In addition, Validus offers risk reporting services and technology to ensure that interest rate exposures and hedge valuations can be tracked and monitored regularly, ensuring full risk transparency.
“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”