17 June 2021

Three reasons investment fund managers use Hedgebook

Here are three key ways Hedgebook makes life easier for investment fund managers or similar finance functions within a hedge fund, private equity or VC firm.

There are three key ways Hedgebook makes life easier for investment fund managers or the equivalent finance function within a hedge fund, private equity or VC firm. These points also apply if you are investing across different geographies and have exposure to international investments.

Hedgebook helps you to better manage the risk associated with these often large and material currency exposures. Using Hedgebook simplifies highly complex FX management requirements and means you’re both on top of your FX exposures and positioned to make better decisions faster – an approach needed in these more volatile times.

1. A single reference point

It may seem obvious, but fund managers tell us having a single reference point for all currency exposure and FX hedging significantly reduces errors and cuts down rework required. Having all of your FX forwards and option structures captured and reported in the same place, alongside cashflow, makes it easier to understand the impact rate movements have on your investments.

Using Hedgebook’s FX Exposure tool you can quickly see:

  • Your complete company’s hedging position, in a clear, graphical visualisation
  • FX forwards, collars, participating forwards and other derivatives
  • Plus, you can model shifts in rates and the direct impact on P&L

You can use the information in the FX Exposure Tool to help drive your hedging strategy with your counterparties. It makes a very real difference having your bank or broker seeing exactly the same information you are, enabling them to be more proactive in managing your account. Customers generally report a 20% improvement in hedging outcomes as a result of using the tool.

2. Independent valuations

While every company is required to provide independent valuations of any outstanding instruments at the time of audit, it is likely you have needs that sit outside of this too. Most of the investment fund managers we work with are also required to produce additional reports. These generally detail valuations of their outstanding deals at the end of each month and conduct sensitivity analysis on those deals.

Hedgebook is recognised as a trusted and independent source for these valuations and can be accessed by running simple reports to provide all the details required by auditors and Boards. It is one of the key reasons some 75% of the Top 30 Audit Firms in the UK also use Hedgebook to validate valuations they receive from their clients.

3. Easy-to-read reporting

Which leads nicely into the final – overarching reason; Hedgebook will save a fund manager and other finance professionals endless reporting hours each month. The software takes away the need for manually creating reports from spreadsheets, justifying its low monthly cost for the platform.

To give you some idea – a corporate user estimates it saves him at least half a day per month on reporting. Board and management reports can be created quickly using the data and visuals from the exposure tool to accurately report on current positions, performance against budget, policy compliance and much more.

More importantly, those reports are in a graphical, dashboard like format that is very easy for your board members to understand. They don’t need to be financial experts and you don’t need to spend hours interpreting complex financial processes into something they will understand.

A great example of this is the Benchmark Report that looks at past performance and helps inform future hedging strategies (click on image below to expand).

FX Benchmark report

More to Hedgebook for Investment Fund Managers

We all know that a good FX hedging strategy can negate currency impact on investments and in some instances even boost investor returns. If you can couple that with a low-cost, simple to use tool that enables you to make really good FX hedging decisions quickly – then it really can make your life as a fund manager, much easier.

While we have covered the importance of having a single view of your current position, the access to audit compliant valuations and the ease of producing board reports – there is a lot more to Hedgebook.

We would be pleased to show you how our software can save you time and money while providing you with the peace of mind that you have access to a leading risk management platform.  Contact us for a chat or demo today.

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