Should private debt firms be looking at foreign exchange hedging? “There are three major categories of currency hedging strategies: those using forwards, options, and proprietary investment processes which usually use a combination of those two,” says James Wood-Collins, Chief Executive of Record Currency Management. “The key aspect of a forward contract is that it is symmetrical,” adds James. “If [the] exposure currency weakens, then the hedge moves into the money, offsetting the loss on the assets; if the exposure currency strengthens, then the hedge moves out of the money, offsetting the gain.”
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