Disrupting Currency Hedging

Protect your profit margin from foreign currency volatility

We design, implement & risk manage currency solutions based on each client's unique business context


Our Mission:

Secure and increase our clients' profit margin


Our Principles:

  1. Massively compress financial costs
  2. Remove currency risk
  3. Increase financial income via interest on cash holdings and profitable currency risk management



For Corporations:

Many small & medium sized corporations are at risk because they do not hedge their foreign currency exposure, resulting in the reduction of their profit margin or even losses.  In some cases this can lead to bankruptcies.   The reasons often cited for taking this risk are due to the high costs usually associated with hedging and the lack of turn-key solutions in the market.  

For those companies that don't hedge, to protect their profit margin from adverse currency fluctuations, instead of hedging, many SMEs add a “currency safety buffer” of a few percentage points on top of their profit margin. However, when currency volatility increases, as experienced frequently over the last 10 years, the currency buffer may not suffice, and SMEs’ profit margin can be eaten away or even wiped out. Read our thought piece or listen to our podcast on how hedging can allow companies to either keep this "safety buffer" as extra profit margin (increasing profitability) or remove the buffer and lower their selling prices (improving competitiveness).

To understand better who should hedge and why, including a detailed case study, read our whitepaper written for SMEs. You can also read our case study on how we were able to help one manufacturing company, whose situation is very similar to that of many companies operating out of Hong Kong, improve their profit margin and minimize costs associated with currency management.

Important Points to Note:

  1. If you are doing cross border business with China and are still paying suppliers in USD, listen to our podcast or read our thought piece on "Why companies should pay their Chinese suppliers in RMB (instead of USD)."
  2. Supply Chain Uncertainties?  Read our SME Series thought piece on "2 Key Features to look for in a flexible Currency Risk Hedging Solution".

For Institutional investors:

Institutional investors, such as private debt and real estate funds, face constant pressure to deliver returns and reduce costs. They must deal with a range of challenges, including the impact of currency volatility on their investments.  In order to reach their risk adjusted return objective, a fund must eliminate the currency risks that erode returns and can generate capital losses as well as recurring costs.

Currency risk must be analyzed with respect to the fund’s strategy, return objective and risk mandate so that currency conversion and risk hedging can be planned and implemented using an efficient operational solution. The objective is to maximize the fund’s risk-adjusted returns by immunizing its capital and returns from currency volatility and minimizing portfolio management costs.

In order to learn more, read our whitepaper written for Funds explaining the key reasons to hedge and a detailed case study.  Alternatively, you can listen to the summary in our podcast interview with Alain Groshens, head of portfolio management.


To address the above problematic our Risk Hedging Solutions were designed to provide:

CONTACT US To learn more about our solutions or for a complementary analysis of your currency risk exposure and how we can help improve your profit margin and save costs.


CLIENT STORY & TESTIMONIAL - MARK OWEN, CO-OWNER, FUNDA:

"Funda is a non-bank lender based in Australia.  We obtained external financing in US Dollars, from a US based private debt fund.  However, given our base currency is AUD, we needed to hedge our AUD/USD exposure, or risk not being able to pay back the US dollar funding.  

After speaking to banks and other FX providers, we decided to partner with SystematicEdge.  One of the reasons we chose to work with them was because they provided a turn-key solution tailor made for our needs, including currency conversion and hedging execution, and were much more cost effective than any of the other service providers that we had spoken to.

Alain Groshens and the team have provided excellent service throughout the entire hedging process.  We were especially pleased that they were able to design a solution that not only eliminated our currency risk but also improved our profit margin by saving us many percentage points!"

MORE ABOUT FUNDA:

Funda is a non-bank lender based in Newcastle, Australia with clients nationally. They’ve been around for 5 years and specialise in small business loans and helping their clients cover their outstanding invoices. They’ve lent millions of dollars to Aussie businesses, and offer market leading repayment terms and provide a 30-day satisfaction guarantee.


PARTNER TESTIMONIAL - DAVID FRIEDLAND, CEO OF INTERACTIVE BROKERS ASIA:

“SystematicEdge, a regulated financial advisor using our execution platform for Direct Market Access, aims to provide Corporations and High Net Worth Individuals with very efficient FX hedging strategies and multi-currency cash management services."

MORE ABOUT INTERACTIVE BROKERS:

SystematicEdge partners with Interactive Brokers (IB), the world’s largest online broker enabling corporations to have direct market access to the Forex market.

  • IB is regulated in most countries and is an investment grade rated firm. Thanks to their 40 years of existence and financial technology development, IB is able to offer the most competitive brokerage with Direct Market Access to all major global exchanges. •Interactive Brokers has more than 1.6 million client accounts.
  • IB is listed on Nasdaq and has a turnover of US$500B and US$10B in capital.

Contact us to learn more about our investment and currency management solutions: insights@systematicedge.com

11 Yip Hing Street, Southmark Tower A, Unit 3301, 33rd Floor, Wong Chuk Hang, Hong Kong, SFC License No. BLO527 


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