Hedging and risk management
Navigate volatility without being blindsided. We help companies find the risks that matter and manage them in a way that is cost-efficient and proportionate to the business.
When clients call us
When volatility reaches the bottom line
Clients usually come to us after a price, a currency or a counterparty has moved against them, or before a decision that increases their exposure.
Volatile input costs
Raw material or energy prices swing, and margins and cash flow move with them.
Foreign currency exposure
You buy, sell or borrow in other currencies, and exchange rates are affecting results.
A large contract or project
A new commitment locks in prices or currencies for months or years.
Concentrated counterparties
A few customers or suppliers account for a large share of revenue or supply.
Lender or board requirements
Lenders or the board want a clear policy for identifying and managing risk.
Liquidity under strain
Inventory, working capital and debt service need to be planned for a range of outcomes.
How we help
From risk discovery to hedging strategy
Hedging and risk management for companies exposed to commodity prices, currencies and counterparties. We make the instruments and the trade-offs understandable, so management can decide with confidence.
Risk discovery
A full decomposition of the risks in the business: counterparty, credit, settlement, market and operational.
Commodity price hedging
Exposures assessed and hedging opportunities evaluated using futures and forwards, with payoffs and credit risk modelled across price scenarios.
Foreign exchange hedging
Currency risk managed with forwards and options, to stabilize input costs, revenues and foreign debt repayments.
Position monitoring
Current positions and payoffs marked to market, and hedges adjusted as exposures change.
Structured solutions
Options with features designed for a particular situation or a specific market outcome.
Liquidity and operational risk
Probabilistic models for inventory, working capital and the cash needed to service liabilities, to manage liquidity and solvency risk.
Our view
Risk management belongs in the operating model
Risks are inherent in every business. Risk management is not. Many companies treat it as a back-office task and spend little time understanding their exposures until one of them causes damage.
We think it belongs in the strategy and the operating model from the start, and should evolve as the business grows. The aim is not to remove all risk, but to decide which risks to keep, which to hedge, and what that protection is worth.
How an engagement works
Five steps from exposure to policy
We start by measuring the exposures, then design a hedging approach that fits the business, its cash flows and its appetite for risk.
- DiscoverIdentify and measure the risks across the business.
- QuantifyModel the effect of each exposure on margins, cash flow and covenants.
- DesignSet the hedging strategy, the instruments and the limits.
- ImplementPut the policy and positions in place, working with your bank or broker.
- MonitorMark positions to market and adjust as exposures change.
Is volatility showing up in your results?
What you receive
A clear view of risk and what it costs to manage
Every deliverable is built for management, the board and lenders.
- A risk map covering market, credit and operational exposures
- Exposure analysis by commodity, currency and counterparty
- A hedging strategy and policy with limits
- Payoff and scenario analysis of hedging options
- Mark-to-market reporting on current positions
- Liquidity and working capital scenarios
Selected clients
Companies we have worked with
Frequently asked questions
Questions we hear most often
Do we need to hedge?
Not always. Hedging has a cost, and some risks are better kept or managed through pricing and contracts. We help you decide which exposures to hedge, and how much protection is worth paying for.
What instruments do you work with?
Mainly forwards, futures and options, and structured options where a situation calls for them. We choose the simplest instrument that does the job.
Do you execute trades?
No. We design the strategy and analyze the positions. Trades are executed through your bank or broker.
Is this only for large companies?
No. Mid-sized companies in manufacturing, agriculture and trade often have significant commodity or currency exposure, and benefit from a clear, proportionate approach.
Do you only work with companies in Vancouver?
No. We are based in Vancouver and work with companies across British Columbia and Canada.
How are fees set?
Fees depend on the scope and complexity of the work. We confirm them in an engagement letter after a first conversation, so the cost is clear before work begins.
Have a question that isn’t covered here? Start a conversation.
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