When a fund offers share classes denominated in different currencies, say, euros or pounds rather than the fund’s base currency, the choice of whether those share classes are hedged can now be a deciding factor for many investors.
Many private‑wealth clients prefer to subscribe in their local currency and avoid worrying about FX swings. The benefit tends to be especially noticeable in funds investing in private credit, real assets, or other strategies where cash flows are comparatively predictable, in those contexts, FX volatility can materially impact returns, making stability via hedging more attractive.
Even using simple forward contracts, the most common tool, the fund must manage recurring operational tasks, which are often underestimated. It must onboard counterparties (with all the associated KYC, legal agreements and collateral arrangements), execute and roll hedges periodically, and monitor counterparty risk.
Record plc (LON:REC) develops bespoke, high-quality, sophisticated solutions for institutional investors, a unique offering stemming from Record’s knowledge and expertise gained from its core currency hedging markets.
