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Case Studies

London based hedge fund

A London based hedge fund was introduced to VFX by an existing customer who had enjoyed a mutually beneficial relationship with VFX over a number of years. Our customer knew the CFO well at the fund, and a conversation about frustrations with the firm's primary bankers highlighted that sourcing a better currency and payments solution would help. The hedge fund was operating a multi-currency asset backed loan fund with differing currency denominated share classes. The fund's bankers had assisted the fund with it's hedging requirements by hedging out the loan books by currency, and then adding an overlay to hedge the individual currency classes as well. VFX analysed the process and suggested a more efficient alternative. VFX's development team constructed an algorithm for the fund to load the loans, by currency, into the program and also list the different shareholdings by net asset value. The program netted off offsetting hedges by creating a synthetic internal hedge and thereby generated a significant reduction in cost of the overall hedging requirement.

Michelle F (fund CFO) 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 was capable of providing an innovative alternative that added significant value to our shareholders".

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