Three characteristics define a dynamic hedging programme.
It is constructed for the specific exposure rather than assembled from a template. It is monitored and executed continuously rather than reviewed periodically. And it is priced across a panel of banks rather than through a single counterparty. Each is set out below.
Not Outsourced. Jointly Run. You Control.
Built for Your Exposure
Tailored Tactics and Customized Solutions
- We don’t offer a one-size-fits-all risk management solution.
- We commence each programme with detailed on-shore workshops, crafting a bespoke hedge structure designed specifically for you.
- We develop an agreed Master Hedge Policy, ensuring your strategy aligns perfectly with your unique risk profile and needs.
Real Time Monitoring, Execution and Reporting
- The position is monitored continuously while global markets are open.
- Execution follows authorisation within the same session rather than at the next review.
- Trades, hedge levels and exposures are available to the client at any time.
Immersive Expertise: Standing by You
Your Risk Management Partner
- We are not only advisors but your hands-on risk management partners. Our Dynamic Hedging Programme is not an outsourced solution. It is a fully integrated, immersive, end-to-end hedge programme.
- Tailoring our approach to your unique risk exposure, our dedicated portfolio managers and analysts invest substantial onshore time executing the Dynamic Hedge Programme in collaboration with your team.
- Our deep integration within your organisation guarantees optimal leveraging of our expertise to deliver maximum benefits.
What Integration Delivers
- Decisions are made on live current information rather than historical reported information.
- Changes in the client’s exposure are reflected in the hedgebook as they arise in real time.
- Authority over the programme and control remains with the client team at every point.
Pricing Across a Panel of Banks
Competitive by Construction
- As independent agent, we are not tied to any single institution.
- Pricing is sourced across a panel of banks and liquidity venues on every transaction.
- Competition between counterparties is structural rather than negotiated, which is where transaction cost and premium savings come from.
Integrated, With Full Oversight
Integration and oversight operate together. The programme runs inside the client organisation, and every transaction passes through a defined authorisation chain before execution.
In-House Integration: Not Outsourced
Client in Complete Control
- The programme is integrated, not outsourced.
- Authority over the programme remains with the client. Every hedge transaction is reviewed and pre-authorised before execution.
No Unnecessary Risk
Compliance Against the Mandate
- Compliance is tested against the master hedge policy rather than against general principle.
- The risk assurance and audit function reviews adherence to process and policy independently of the teams that execute.
Three Teams, One Mandate
Seamless Collaboration
- Three teams operate under the master hedge policy: the risk management committee, the execution team, and internal audit and risk assurance.
- The first two are joint with the client. The third is deliberately separate from both.
Transparency and Oversight
- Positions, pricing and rationale are visible to the client at all times, and the reasoning behind each decision is recorded.
- Authorised officers from both the client and the manager approve every hedge transaction before execution.
How the Programme Operates
Four defining characteristics
Continuously Managed
The programme is not static. Hedge ratios are tuned weekly, instruments selected tactically, and cover front or back loaded as conditions warrant. Monitoring and execution run while global markets are open.
Rolling Cover
A minimum hedge ratio over a rolling twelve months is typically set at 50%. Duration extends beyond that where the client's tolerance for mark to market movement and available counterparty credit allow.
Hedge Policy
Every component is discussed, stress tested and formalised in the master hedge policy. That document is the mandate under which the programme operates, and nothing sits outside it.
Daily Stress Testing
The hedgebook is scenario and stress tested daily against the agreed protection and participation target, commonly 70% of each. Testing daily rather than periodically is what allows the structure to be corrected before it drifts.
