Case Studies

London-based hedge fund was introduced to VFX by an existing client who had enjoyed a long-term, mutually beneficial relationship. The client knew the hedge fund’s CFO well and, after discussing frustrations with the firm’s primary bank, highlighted the need for a better currency and payments solution.

The hedge fund operated a multi-currency, asset-backed loan fund with different currency-denominated share classes. The bank had been helping with hedging by managing the loan books by currency and adding an overlay to hedge individual share classes. However, VFX’s team identified an opportunity for a more efficient solution.

VFX developed a custom algorithm that allowed the fund to load loans by currency and list shareholdings by net asset value. The algorithm netted off offsetting hedges, creating a synthetic internal hedge that significantly reduced the overall hedging costs.

Michelle F, CFO of the fund, commented:
“Using VFX reduced the fund’s hedging costs significantly. It was a breath of fresh air dealing with an institution that genuinely understood our business and provided an innovative solution that added significant value to our shareholders.”