We design customized multi-currency treasury solutions based on each client’s unique context to maximize interest from cash holdings and protect against currency volatility with our FX Hedging product suite. Today’s SMEs, whether a manufacturer, Fintech, Web3 or family business, are bold, agile, and global. They need financial strategies that match their ambitions.
Multi-currency treasury management is no longer a luxury reserved for large corporations with deep pockets and extensive resources. It is a competitive advantage that SMEs can–and should–harness to fuel growth, protect profits and seize new opportunities. Download our SME’s Guide to Multi-Currency Treasury Management to learn more!
Gone are the days when managing cash meant parking it at the bank and simply hoping for the best. Earn compelling interest on cash holdings through optimal treasury management. Companies doing cross-border business often have idle cash in multiple currencies needed to be held for various known and unknown expenses. We work with companies to optimize the income on these cash holdings while taking no, or low market risk, depending on the client’s risk profile and need for flexibility in accessing their cash.
Our approach to cash management is built on three foundational principles to maximize capital efficiency:
See how we optimize cash balances →
Corporations intend to optimize their cash management and improve liquidity with Cash Pooling. However, it involves the consolidation of cash balances from different accounts or subsidiaries within a group into a single, centralized account, which is not always easy. Once accomplished, though, this allows the organization to manage its cash more efficiently, reduce borrowing costs, and maximize interest earnings on surplus cash. Cash Pooling is commonly used by multinational corporations and large organizations with complex structures and multiple subsidiaries or divisions. However, we are seeing more and more Hong Kong based companies with many local subsidiaries wanting to implement the same sophisticated programs as their larger multi-national counter-parts in order to reap the four benefits outlined below:
Read our thought piece on this for more information.
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, many 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 the SMEs’ profit margin can be eaten away or even wiped out. 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.
Earn compelling interest on cash holdings through optimal treasury management. Asset & Wealth managers, private & public markets funds (such as real estate or private debt) often have idle cash in multiple currencies needed to be held for various known and unknown upcoming redemptions. We work with these entities to optimize the income on these cash holdings while taking no, or low market risk, depending on the client’s risk profile and need for flexibility in accessing their cash.
Institutional investors, such as Asset & Wealth managers, 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 objectives, institutional investors 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 investor’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 risk-adjusted returns by immunizing the 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.
Earn income on cash holdings through optimal treasury management. Global families often have idle cash needed to be held for various known and unknown expenses. We work with families to optimize the income on these cash holdings while taking no, or low market risk, depending on the client’s risk profile and need for flexibility in accessing their cash.
Today’s global families are subject to currency volatility, due to their international lifestyles. For example when buying or selling a property, yacht or airplane, these transactions can lead to losses due to currency volatility compared to their base currency. In addition, global families often have expenses and income in various currencies, depending on the location of their global businesses or other income earning endeavors. It makes no business sense to lose hard earned gains to currency fluctuations. At SystematicEdge, we work with our clients to identify and manage the optimal solution to eliminate this currency risk.
via interest on cash holdings.
Customized Hedging Program design, implementation and risk management.
We do not hold client’s money, it stays in the client’s account held by a first-tier cash custodian.
Our solutions are 100% STP (Straight Through Processing) with real time account valuation and risk management reports available and accessible via a secured internet portal.
CONTACT US to learn more about our solutions or for a complimentary analysis of your current portfolio or your currency risk exposure to see how we can help you improve your profit margin or returns and save costs.
