Hedging for Asset Managers

We provide specialist currency management solutions to manage the currency risk in private assets, share classes, feeders, and other funds.

Record Overview

Information as at 30 September 2024

lse

40+

Years of currency experience

$100bn+

Group AuM*

assets under management

$850bn+

Annually traded FX volumes

global officess

30+

Agency ISDAs with global banks

140+

Institutional FX clients

employees

90+

Employees globally

lse

40+

Years of currency experience

$100bn+

Group AuM*

assets under management

$850bn+

Annually traded FX volumes

global officess

30+

Agency ISDAs with global banks

140+

Institutional FX clients

employees

90+

Employees globally

* AUM managed by Record Financial Group is a combination of the notional value of currency assets under management through the Group’s currency products, and the total market value of other assets managed by the Group. By convention this is quoted in US dollars

The Record Value Proposition

Record’s scale, long-standing industry relationships and asset class expertise allow it to provide unique hedging solutions for private markets managers. Optimising for cost, operational and capital efficiency.

No margin, no collateral trading

Uncollateralised & unmargined FX trading lines*

Leverage Record’s agency ISDAs

30+ relationships with global banking partners

Outsourced operational risk

Fully outsourced offering including tailored reporting & ongoing support

Record Services

Bespoke hedging structures to minimise FX cash flows

Tailored solutions to align with underlying portfolio liquidity needs

Cost efficient trading

Transparent pricing and low execution costs (~0.5-3.0 bps p.a.)

* Typically Record aims to negotiate uncollateralised trading lines. However, this is not guaranteed and for certain client types collateral may be required.

The Record Service

Record Offers a Fully Outsourced Service Throughout the Entire Currency Management Process

  • From negotiating your funds to be added to our agency ISDAs, through to all aspects of settlement, trade execution, transaction cost analysis and regulatory reporting
  • Our clients value our ability to provide a regulated advisory service whilst fully transferring the operational risks and fiduciary duty of currency management to us

Total Alignment With Our Clients’ Interests, Acting As Your Agent

  • We are never the counterparty to your trades and do not benefit from your trading frequency or volume. We receive only a management fee, charged on the notional size of your open FX hedges

Currency Management Solutions Designed To Meet Your Unique Needs

  • Our hedging strategy specialists work closely with you to understand your requirements and construct an optimal currency management programme
  • Different approaches can be explored at different stages of the fund lifecycle. For example, managing the gradual implementation of currency hedges as commitments are called, through to maintaining protection when the fund is nearing maturity and liquidity could be lower

Committed To Achieving Best Execution On All Trades

  • We focus on negotiating trading arrangements and constructing your optimal bank panel. We regularly monitor counterparty bank credit ratings and assess their quality of execution to ensure the ongoing suitability of your trading arrangements
  • Our strong & longstanding relationships with 30+ global counterparty banks make us confident in our ability to offer some of the most competitive FX execution costs in the industry

Reporting Solutions Tailored To You

  • We report and attribute hedging performance at a granular level, providing insight on the impact that your currency hedging programme has on overall fund performance

Considerations When Choosing A Currency Management Strategy

Record partners with clients to design bespoke, optimised currency management strategies that account for various factors.

Fund Asset Class

Different asset classes can benefit from the use of different instruments;

  • FX forward contracts are flexible and well suited to hedging income generating assets.
  • FX options can be more useful in managing currency risk in the acquisitions prevalent in private equity funds.

Fund Structure & Liquidity Profile

Open-ended and closed-ended funds will have different liquidity profiles around which a hedging programme can be built. Drawdown funds, where investor and fund currency differ, can benefit from managing the possibility of FX related liquidity shortfalls when calling upon investors’ committed capital.

Tolerance For FX Related Cashflows

Funds with low levels of liquidity may benefit from specialised instruments with incorporated credit, which can provide protection with no upfront or ongoing cash requirements.

Stage of Fund Lifecycle

Different phases of a fund’s life require different hedging considerations. Early phase lock-up periods can create a significantly different liquidity profile to later phases when a fund is mature and liquidating assets.

Contact Us

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Tel: +44 (0) 1753 852 222