Meet our Experts – Arnoud Doornbos

14-07-2020 | Arnoud Doornbos | treasuryXL

Our Expert Arnoud is Associate partner at ILFA Group and Managing partner at Smartfunding Haarlem. With over 30 years of experience both as Investment banker and with listed and non-listed corporates, Arnoud is specialised  in Cash Management, Risk Management, Corporate Finance, FX, Interest Derivatives, Consultancy, interim management, financial engineering, and finance arrangements.

We asked him 10 questions, let’s go!

1. How did your treasury journey start?

After studying business economics I started working as an accountant. After a few years, I was able to read balance sheets and had seen many companies inside. My wish was to do something commercial with that knowledge. So after 4 years, I switched to banking and became a treasury sales advisor with a Dutch bank, NCB Bank. That was the beginning of a long career as an investment banker with various domestic and foreign banks. I moved from junior dealer to Head of Sales at Deutsche Bank, Rabo International and BNP Paribas. I became an expert in FX and interest rate derivatives and became a treasury advisor to a number of large corporates. In 2013 I had the opportunity to co-own a treasury consultancy / IT company in Belgium, called Treasury Services. There I was responsible for the marketing and sales of the company. I obtained consultancy assignments and sold the treasury software, a treasury management system called TreasuryMetrics. During that period I gained a lot of treasury knowledge and in combination with my banking experience I was able to give our customers good treasury advice. At the end of 2017 I sold Treasury Services to Ilfa, where I am now an Associate Partner and I am a senior treasury consultant.

2. What do you like about working in Treasury?

Working in treasury is fun and interesting because in that position you actually see everything that happens in the company like a spider in the web. All business matters that generate money flows go through your treasury department. In addition next to cash management a good risk management is very important.

3. What is your Treasury Expertise?

I find it interesting to correctly identify and quantify the financial risks. Then mitigate the risks with the right financial instruments. My banking background with 25 years dealing room experience makes me an expert in pricing and executing of financial instruments. I really like the pricing and execution of hedging products. Specially FX and interest rate derivatives and loan pricing.

4. Do you have examples of risk mitigation, creation of opportunities and/or cost savings?

One of my relations took over a company in the UK. This investment was paid in GBP. A translation risk EUR/GBP therefore arose. The customer asked what is the best to buy the GBP. I advised him not to buy the GBP but borrow it from the company’s EUR liquidity through FX swaps. If he had bought the GBP, a FX risk would have been created 100% by the GBP amount on top of the newly created risk of a subsidiary in the UK. Translation risk on foreign assets is NOT a FX issue but instead a finance issue. For another large corporate, i executed the unwind of a large CCIRS portfolio in EUR/USD. Due to my banking dealing room background, I was an equal counterparty to the banks in the negotiations and I was able to make significant savings on transaction costs.

5. What has been your best experience in your treasury career until today?

My best treasury experience is that I have been involved in a M&A case where the customer made a major acquisition in the USA and I had to hedge the currency component of that transaction. More than a billion USD were involved. I was on the customer’s deal team, behind the Chinese wall. First all secret discussions internally and with the banks involved. The credit facilities had to be arranged before we could do the execution. At the end the large execution was done with Algo trading with the banks. Algorithmic trading is a method of executing orders using automated pre-programmed trading instructions that take into account variables such as time, price and volume.

6. What has been your biggest challenge in treasury?

There are a lot of regulations hitting our banks and us, and the financial arena is changing. In Europe, we are now facing the challenge of negative interest rates that, apart from lowering our interest payments, has other effects. A treasurer need to be light on foot and quick to react to these challenges, and understand their importance. My biggest challenge is being able to navigate in an ever-changing world.

7. How have you seen the role of Corporate Treasury evolve over the years?

The Treasurer’s area of ​​activity consists of supporting the company / CFO in managing and controlling the company’s balance sheet (Corporate Finance Management), managing and controlling financial resources (Treasury operations) and managing and controlling financial risks. of the company (Financial Risk Management). The role of a Treasurer has become more and more a strategic business partner of the CFO and teams such as Control, Tax, Accounting and Legal, and provides support to business units, sales teams, etc.

8. The coronavirus is undoubtedly an unprecedented crisis. In general, can you elaborate on the impact this virus has on treasury from your perspective?

The corona crisis has a major impact on our daily lives. A lot will change in the coming period, both business and private. Orders and appointments are canceled, customers cannot pay (on time) and purchasing and sales are difficult. As a company or organization, it is now more than ever important to know how your company is doing in the coming months. It is important that you have a clear financial overview. In good times this helps you to manage your money wisely and in uncertain and bad times you know where you stand and where to adjust. Liquidity management is simply the systematic management of money that enters and exits your company. You systematically look ahead to your cash balance. For many companies it is an integral part of the business, but how do you ensure that you can manage your liquidity as well as possible? A solid and proper cash flow forecasting will assist you in this.

9. What developments do you expect in corporate treasury in the near and further future?

The last few years have been eventful for treasuries. We have had to react to a number of regulatory changes and a vibrant macro environment, while operating in the shadow of the 2008 global financial crisis and more recently the Corona crisis. We have also had to respond to changing working practices, as automation and digitization have enabled easier and faster transaction and communication processes. With organisations seeking to introduce leaner, more efficient and increasingly automated operations, it may seem logical to suppose that treasuries will assume a progressively transactional role. However there is still a significant amount of wariness regarding the stability of the world’s capital markets — a concern that feeds into many treasury priorities, such as liquidity, hedging of risk and bank relationships. With these key concerns top of the mind in the treasury, many businesses are looking to their treasury departments to act as internal advisers and provide strategic input on funding requirements and how best to limit exposure.

10. What is your best advice for businesses without a Treasurer?

Every organization has to deal with treasury. Even if it only has 1 bank account, treasury actions must still be performed. Ilfa makes it possible for any organization to have its own professional treasury function, regardless of the size of the organization and the experience in the treasury field. Our service and systems give you quick and clear insight. Consider the course of your liquidity, interest rate and currency risks. In addition, you know which financing is best suited and we help you reduce your bank costs. A treasury does not aim to beat financial markets, but systematically monitors the money flows of your organization and the development of financial risks. This way you can identify in time and then act. A company without its own treasury can rely on Ilfa’s special services, Treasury as a Service (TaaS). Many organisations are too small to have their own treasury department. On an ad hoc or continuous basis, Ilfa takes the companies concerns about the execution of treasury tasks off their hands in a way that suits their organization and wishes best.

 

Arnoud Doornbos

Interim Treasury & Finance | Consultant

 

 

 

 

Does your business need support in Treasury or a Treasury QuickScan?

We have treasurers available, go to Rent a Treasurer for all information.



Doing business in the Netherlands has become increasingly difficult

27-1-2020 | by Rowan Hermes | Ilfa Group

Our partner ILFA group wrote a blog underlying the phenomenon that doing business in the Netherlands has become increasingly difficult. Based on the Ease of Doing Business Index, The Netherlands scores lower every year, as it becomes more and more difficult for SME’s to finance their projects.

Blog is in Dutch language:

De Ease of Doing Business-index wordt gebruikt om economieën met elkaar te vergelijken. Elke economie krijgt op basis van haar prestaties een algemene score en zo ontstaat een ranglijst van landen gebaseerd op het gemak waarmee zaken gedaan kunnen worden. Waar Nieuw-Zeeland en Singapore elkaar al jaren afwisselen als nummer 1 en 2, zakt Nederland steeds verder weg op de lijst. De voornaamste reden is de moeilijkheden die het mkb heeft om aan financiering te komen.

De ‘Ease of Doing Business’-index is bedacht door twee economen van de Wereldbank, Simeon Djankov en Gerhard Pohl. De Wereldbank is een gespecialiseerde organisatie van de Verenigde Naties en ‘s werelds grootste instituut voor ontwikkelingssamenwerking. Hun voornaamste doel is armoedebestrijding en met dat doel voor ogen worden leningen verstrekt aan ontwikkelings- en middeninkomenslanden. Deze leningen worden ingezet voor allerlei ontwikkelingsprojecten, van hervormingen in de gezondheidszorg tot infrastructuur- en milieuprojecten. Voordat leningen worden uitgegeven, moeten ontvangende landen aan strenge eisen voldoen, denk aan het invoeren van anticorruptiemaatregelen en privatisering van de overheid.

Doing Business-rapport

De Ease of Doing Business-index wordt gebruikt om landen onderling te kunnen vergelijken en in te delen. In landen met een lage numerieke waarde, en dus een betere score, zijn de regels voor het doen van zaken beter en meestal simpeler. Daarnaast is er betere bescherming van eigendomsrechten. Uit onderzoek van de Wereldbank blijkt dat het verbeteren van deze regels en bescherming leidt tot verbetering van de economische groei.

Al sinds 2004 wordt jaarlijks een rapport uitgebracht waarin indicatoren van zakelijke regels en eigendomsrechten van landen worden vergeleken, niet alleen ten opzichte van elkaar, maar ook ten opzichte van voorgaande jaren. De algemene score van een land is gebaseerd op het gemiddelde van de 41 subindicatoren van 10 onderwerpen. De onderwerpen zijn:

  1. Starten van een bedrijf
  2. Omgang met bouwvergunningen
  3. Toegang tot elektriciteit
  4. Registratie van vastgoed
  5. Toegang tot financiering
  6. Bescherming van minderheidsaandeelhouders
  7. Betalen van belasting
  8. Handel over de grens
  9. Volgen van overeenkomsten
  10. Oplossen van insolvabiliteit

Daarnaast wordt gekeken naar, maar niet meegenomen in de algemene score, de inzet van werknemers en overeenkomsten met de overheid.

Employing workers (inzet van werknemers) en Contracting with the government (overeenkomsten met de overheid) worden niet meegenomen in de algemene Doing Business-score.

Bron: Rapport Doing Business 2020

Doing Business 2020

Dit jaar is het rapport Doing Business 2020 uitgebracht. Dit rapport, nummer 17 in de jaarlijkse serie, vergelijkt 190 economieën onderling en door de tijd heen. De gegevens zijn actueel tot 1 mei 2019. Alle data zijn terug te vinden op de website en in de rapporten van de Wereldbank.

De grootste algemene conclusie van het meest recente rapport is dat ontwikkelingslanden hun achterstand op ontwikkelde landen aan het inhalen zijn, maar dat het gat nog steeds groot is. Uit de indicatoren blijkt dat er nog veel ruimte is voor ontwikkelingslanden om aan te haken bij de ontwikkelde landen. Waar op gefocust moet worden is te zien aan de scores in de rapporten en dat is de reden dat de Doing Business-rapporten ingezet kunnen worden om beleid te bepalen. Progressie wordt immers gebenchmarkt, uitdagingen worden blootgelegd en positieve ontwikkelingen worden vastgelegd. Daarnaast kunnen ontwikkelingen in andere landen vergeleken worden met ontwikkelingen van de eigen economie. Verder worden per land de grootste hervormingen beoordeeld, sommige maken het makkelijker om zaken te doen, terwijl andere hervormingen het doen van zaken juist moeilijker maken. Zo wordt ook feedback gegeven op de genomen maatregelen.

‘Doing business’ in Nederland

Nederland staat in het Doing Business 2020-rapport op plek 42 van 190 economieën. Dit is de slechtste positie ooit gemeten voor Nederland. Over de afgelopen 15 jaar staat de Nederlandse economie gemiddeld op plek 29, met in 2020 de slechte positie (42) en in 2008 de beste positie van 21. Ten opzichte van vorig jaar is de positie verslechterd van 36 naar 42.

Hoe lager de lage numerieke waarde, hoe beter de score. 2008 was het beste jaar voor Nederland en 2020 het slechtste.

Bron: tradingeconomics.com

De Nederlandse economie scoort met name slecht op het onderdeel ‘Toegang tot financiering’ met een 119e plek. Dit is gelijk aan de score en positie van Griekenland en Italië. Misschien wel de belangrijkste reden voor deze slechte score is de afwezigheid van een centraal digitaal kredietregister in Nederland. Een kredietregister laat zien waar leningen geregistreerd staan. In het onderzoek wordt hier veel waarde aan gehecht. Ook een digitaal zekerhedenregister ontbreekt. Nederland loopt hierin achter op andere landen, omdat veel registratie nog op papier wordt gedaan in plaats van digitaal.

Er spelen nog meer factoren, zoals de bancaire monocultuur. De financiële producten die door banken aan het mkb aangeboden worden lijken sterk op elkaar en sluiten niet altijd aan bij de behoeften van het mkb. Veel mkb-bedrijven kunnen daardoor niet bij banken terecht voor financiering. Daarbij is de inzet van alternatieve financieringsvormen (nog) niet groot genoeg om de afname aan bancaire financiering voor het mkb op te vangen.

Al met al genoeg verbeterpunten voor de Nederlandse overheid om hun beleid op aan te passen. Hopelijk kan zo het zakenklimaat in Nederland verbeterd worden en de positie van de Nederlandse economie in Doing Business 2021 weer richting de top 20 gaan.

Source

17 terms investors need to know about

20-1-2020 | by Rowan Hermes | Ilfa Group

Our partner ILFA group wrote a blog about 17 terms all investors need to know about.

Blog is in Dutch language:

Nominale waarde, credittoets, trustakte… Als nieuwe investeerder belandt u in een wereld met een hele eigen terminologie. Wij vinden het belangrijk dat iedereen, ongeacht zijn of haar ervaring met investeren, zo goed mogelijk geïnformeerd is voordat wordt overgegaan tot de aanschaf van obligaties bij AndersFinancieren. Daarom zetten wij voor u de belangrijkste termen op een rijtje.

Obligaties

Obligatielening

Een obligatielening wordt uitgegeven door de uitgevende instelling. Het is meestal een geldlening op lange termijn opgedeeld in delen met dezelfde waarde en rechten. De lening wordt afgesloten met meerdere investeerders. Deze investeerders krijgen elk een schuldbewijs, oftewel obligatie.

Uitgevende instelling

Een instelling die obligaties uitgeeft of van plan is om dit te doen. Een instelling kan zowel een rechtspersoon, overheid, internationale organisatie of instelling zijn.

Obligatie

Een obligatie is het schuldbewijs van een uitgevende instelling aan een investeerder. In andere woorden is een obligatie het bewijs dat de investeerder geld heeft uitgeleend aan de uitgevende instelling.

Nominale waarde

De nominale waarde van een obligatielening is het totaalbedrag dat de uitgevende instelling met de lening wil ophalen. Dit bedrag wordt in gelijke stukken gedeeld, de obligaties.

Obligatiehouder

De eigenaar van een of meerdere obligaties. Deze persoon heeft normaalgesproken recht op rente en de terugbetaling van de obligatiewaarde aan het einde van de looptijd.

Rente

Als tegenprestatie voor het uitlenen van geld wordt rente uitgekeerd aan de obligatiehouder. Op maandelijkse of jaarlijkse basis wordt een vast of variabel percentage uitgekeerd. Na de looptijd wordt de waarde van de obligaties uitbetaald.

Converteerbare obligaties

Een converteerbare obligatie is een speciale vorm van obligaties, deze kunnen omgezet worden naar aandelen van de uitgevende instelling. Vooraf is bepaald hoeveel aandelen een obligatie waard is.

Achtergestelde obligaties

Wanneer de uitgevende instelling de lening niet terug kan betalen, komen houders van achtergestelde obligaties achteraan op de lijst van schuldeisers te staan. Het risico dat de lening niet wordt terugbetaald is groter, waardoor het rentepercentage meestal hoger is.

Risico’s en zekerheden

Risico’s

Investeren is risicovol. De kans bestaat dat u (een deel van) uw ingelegde geld verliest, omdat de uitgevende instelling niet in staat is de lening (volledig) terug te betalen. Echter, zonder risico zal een investering geen geld opbrengen.

Zekerheden

Een obligatie brengt niet alleen risico’s, maar ook zekerheden met zich mee. Zekerheden zijn onderpanden of waarborgen in de vorm van geld, goederen, voorraden of rechten. Wanneer de lening onverhoopt niet terugbetaald kan worden, kan de obligatiehouder het onderpand opeisen.

Hypotheekrecht

Wanneer een obligatielening wordt uitgegeven, kan hypotheekrecht een zekerheid zijn. Het hypotheekrecht houdt in dat het onderpand verkocht wordt en uit de opbrengst worden de obligatiehouders terugbetaald.

Pandrecht

Een pandrecht is vergelijkbaar met een hypotheekrecht. Het grootste verschil is dat een hypotheekrecht over onroerende goederen gaat (bijvoorbeeld grond en gebouwen), terwijl een pandrecht niet op onroerende goederen gevestigd kan worden. Een pandrecht kan wel op veel andere zaken gevestigd worden, bijvoorbeeld inventaris, auto’s, voorraad of aandelen.

Eerste of tweede rang

Een eerste recht betekent dat de obligatiehouders als eerste hun geld zullen ontvangen, ze hebben voorrang op andere partijen. Een recht tweede in rang betekent dat eerst de houders van het eerste recht betaald zullen worden. Als er geld over is, zijn de houders van het tweede recht aan de beurt.

Credittoets

Naast zekerheden die de kans vergroten dat u ingelegd geld terugkrijgt, zijn er ook instrumenten die u helpen om te bepalen of de risico’s van een obligatie bij u passen. Zo is een credittoets een betrouwbare, onafhankelijke toets van de kredietwaardigheid en kwaliteit van de uitgevende instelling, haar management en plannen. Ook wordt er gekeken naar onder andere duurzaamheid, sociale impact en de waarde van het onderpand.

AndersFinancieren

AFM

Het publiek, het bedrijfsleven en de overheid moeten vertrouwen kunnen hebben in de financiële markten en dat financiële instellingen op een duidelijke en eerlijke manier handelen. Daarom houdt de Autoriteit Financiële Markten (AFM) toezicht op de financiële markten.

Financiële partijen die een rol vervullen richting een niet-professionele investeerder moeten over een AFM-vergunning beschikken. Voor het verstrekken van de AFM-vergunning wordt getoetst of de betreffende partij beschikt over de juiste procedures en of de beleidsbepalers integer, geschikt en vakbekwaam zijn.

Trustakte

De overeenkomst tussen de uitgevende instelling en de Stichting Obligatiehouders AndersFinancieren. Hierin wordt onder andere vastgelegd welke zekerheden, betalingen en verplichtingen bij de uitgifte van de obligaties horen.

Stichting Obligatiehouders AndersFinancieren

Deze stichting houdt toezicht op de geldstromen tussen de betrokken partijen bij een obligatie-uitgifte en behartigt de belangen van de obligatiehouders tijdens de looptijd van de obligatielening. Mocht er onverhoopt een situatie ontstaan waarin een uitgevende instelling niet meer aan haar verplichtingen kan voldoen, zal het bestuur van de Stichting namens de obligatiehouders optreden en eventueel beschikbare zekerheden uitwinnen.

Source

Exclusive interview with FX specialist Arnoud Doornbos about FX Risk Management

6-1-2020 | by Kendra Keydeniers | Arnoud Doornbos | Ilfa Group

On January 23rd, 2020 Ilfa and Global Reach are organising a masterclass on foreign exchange risk management. FX experts Michael Jansen of Global Reach and Arnoud Doornbos of Ilfa will guide you through the design of a FX risk management program and demonstrate which opportunities a program like this has for your organisation.

Go to event and register for the masterclass. Places are limited so we recommend to secure your spot today.

treasuryXL is delighted to share our exclusive interview with one of the organizers and FX specialist, Arnoud Doornbos of Ilfa.

What is Foreign Exchange Risk Management?

Foreign exchange risk management strategy or FX hedging strategy are terms used to define all the measures devised by businesses or investors to protect the value of their cash flows, assets or liabilities from adverse fluctuations of the exchange rate.

Hedging is used by companies to manage their currency exposure. If a company needs to buy or sell one currency for another, they are exposed to fluctuations in the foreign exchange market that could affect their costs (or revenues) and ultimately their profit.

By booking a hedge, companies protect an exchange rate against a specified sum of currency for a desired timescale, providing companies with certainty.

There are a range of products that can be used for hedging, depending on the companies objective and the exposure they are trying to protect.

Typically, a company would hedge their foreign exchange (FX) exposure to protect its profit margin from market volatility. Hedging is most common in companies that have an exposure to a secondary currency and have fixed prices on their products or services.

What are the types of Foreign Exchange risk?

Foreign Exchange exposure is classified into three types:

  • Transaction exposure deals with actual foreign currency transaction.
  • Translation exposure deals with the accounting representation
  • Economic exposure deals with little macro level exposure which may be true for the whole industry rather than just the firm under concern.

Currency risks can have various effects on a company, whether it operates domestically or internationally. Transaction and economic risks affect a company’s cash flows, while transaction risk represents the future and known cash flows. Economic risk represents the future (but unknown) cash flows. Translation risk has no cash flow effect, although it could be transformed into transaction risk or economic risk if the company were to realize the value of its foreign currency assets or liabilities. Risk can be tricky to understand, but by breaking it up into these categories, it is easier to see how that risk affects a company’s balance sheet.

What are the most common critical Foreign Exchange risk problems that companies make?

Businesses that operate internationally or domestically must deal with various risks when trading in currencies other than their home currency.

Companies typically generate capital by borrowing debt or issuing equity and then use this to invest in assets and try to generate a return on the investment. The investment might be in assets overseas and financed in foreign currencies, or the company’s products might be sold to customers overseas who pay in their local currencies.

Domestic companies that sell only to domestic customers might still face currency risk because the raw materials they buy are priced in a foreign currency. Companies that do business in just their home currency can still face currency risk if their competitors operate in a different home currency.

What critical elements of Foreign Exchange risk are often overlooked?

One of the critical elements of the currency risk that are overlooked is the correct identification of the type of FX risk. A distinction must be made between certain and uncertain cash flows in FX. With certain cash flows, the company has to deal with a linear risk that must be covered with a linear financial hedging instrument, an FX forward. With an uncertain cash flow, risk profile is not linear and it is dangerous to use FX Forwards to hedge. FX Options are better financial products to hedge.

If the company does not include FX Options in its Treasury policy, the second best option is to use FX forwards for, for example, 50% of the principal sum of the underlying risk.

Anticipated and committed exposure cycle

How can you measure Foreign Exchange risk and the different types?

There are many ways to measure foreign exchange risk, ranging from simple to quite complex. Sophisticated measures such as ‘value at risk’ may be mathematically complex and require significant computing power.

Register of foreign currency exposures

A very simple method is to maintain a register of exposures and their associated foreign exchange hedges. Basically the details of each hedge are recorded against its relevant exposure. This type of approach may also assist with compliance with accounting standards.

Table of projected foreign currency cashflows

Where the business both pays and receives foreign currency, it will be necessary to measure the net surplus or deficit for each currency. This can be done by projecting foreign currency cash flows. This not only indicates whether the business has a surplus or is short of a particular currency, but also the timing of currency flows.

To properly determine the FX risk, account must be taken of the differences in sensitivity of the incoming and outgoing FX cash flows.

Sensitivity analysis

A further extension of the previous measure is to undertake sensitivity analysis to measure the potential impact on the business of an adverse movement in exchange rates. This may be done by choosing arbitrary movements in exchange rates or by basing exchange rate movements on past history.

Value at risk

Some businesses, particularly financial institutions, use a probability approach when undertaking sensitivity analysis. This is known as ‘value at risk’. While it is useful to know the potential impact of a given change in exchange rates (say a USD one cent movement) the question will arise: how often does this happen? Accordingly, we can do a sensitivity analysis using past price history and apply it to the current position. Then, given the business’s current position, and based on exchange rates observed over the last two years, it can be 99 per cent confident that it will not lose more than a certain amount, given a certain movement in exchange rates. In effect, the business has used actual rate history to model the potential impact of exchange rate movements on its foreign currency exposures.

What steps do you need to make to create a Foreign Exchange strategy?

Transaction risk is often hedged tactically (selectively) or strategically to preserve cash flows and earnings, depending on the companies treasury view on the future movements of the currencies involved. Tactical hedging is used by most firms to hedge their transaction currency risk relating to short-term receivable and payable transactions, while strategic hedging is used for longer-period transactions.

Translation, or balance sheet, risk is hedged very infrequently and non-systematically, often to avoid the impact of possible abrupt currency shocks on net assets. This risk involves mainly long-term foreign exposures, such as the firm’s valuation of subsidiaries, its debt structure and international investments. However, the long-term nature of these items and the fact that currency translation affects the balance sheet rather than the income statement of a company, make hedging of the translation risk less of a priority for management. For the translation of currency risk of a subsidiary’s value, it is standard practice to hedge the net balance sheet exposures, i.e., the net assets (gross assets less liabilities) of the subsidiary that might be affected by an adverse exchange rate move.

Translation risk is for a large part a Finance issue. Within the framework of hedging the exchange rate risk in a consolidated balance sheet, the issue of hedging a companies debt profile is also of paramount importance.  The currency and maturity composition of a firm’s debt determines the susceptibility of its net equity and earnings to exchange rate changes. To reduce the impact of exchange rates on the volatility of earnings, the company may use an optimization model to devise an optimal set of hedging strategies to manage its currency risk.

What is, in your perception, the biggest benefit of a working Foreign Exchange strategy?

Foreign exchange risk management is thus fundamental but it is often considered to be too complex, expensive and time-consuming. Nonetheless, with a simple, tailored monitoring activity, it can neutralise currency fluctuations and bring the following benefits: Securing marketing margins. Optimising cash-flow estimates.

What is your best advise for companies dealing with Foreign Exchange risk?

This Forex market is open 24 hours a day, 5 days a week and with a daily volume of $ 6.6 trillion the most liquid and largest financial market in the world. For most companies, FX risks are non-core risks The objective of most companies is not to be an FX trader. By correctly identifying and quantifying the FX risks and then neutralizing them with the correct financial FX hedging instruments, companies will have little or no trouble with currency fluctuations on the financial FX markets. The implementation of the correct procedures forms the basis of good FX risk management and will make opportunistic behavior of management disappear.

 

Arnoud Doornbos

Associate Partner Ilfa

FX specialist

 

 

 

 

 

Join ILFA and Global Reach for a Foreign Exchange Masterclass on 23rd January 2020

16-12-2019 | by Kendra Keydeniers | Ilfa Group

Learn about the different FX risks, how to mitigate these, and how the use of tools might help.

About this Event

Ilfa and Global Reach are organising a masterclass on foreign exchange risk management. FX experts Michael Jansen of Global Reach and Arnoud Doornbos of Ilfa will guide you through the design of a FX risk management program and demonstrate which opportunities a program like this has for your organisation.

During the masterclass they will focus on:

  • Creating a foreign exchange strategy
  • Analysing your business’ operating cycle to identify FX risks
  • Calculating your business’ exposure to FX risks
  • Managing your foreign exchange exposure via hedging
  • Specialist FX tools

Program

16:00 Walk in with coffee and thee

16:15 Introductions Ilfa and Global Reach

16:20 Part 1: Educating FX risks

17:30 Break

17:45 Part 2: Ilfa’s Treasury as a Service and Global Reach Intelligence

18:15 Drinks and snacks

19:00 End

Register

You can register for the masterclass until the 8th of January 2020.

If you have questions, please do not hesitate to get in touch with Michael Jansen via mjansen@globalreachgroup.com, +31 6 11 35 07 60 or Arnoud Doornbos via arnoud@ilfa.nl, +31 6 83 94 16 99.

About Ilfa

Ilfa helps businesses and social organisations to obtain funding and to manage their treasury. Since 1995, they are specialised in attracting bank and/or alternative financing, managing liquidity and managing financial risks. Ilfa’s core values are innovative, professional, driven and transparent. Since 2013, ILFA Group is in possession of a permit as an investment firm in accordance with the Financial Supervision Act.

About Global Reach

Global Reach is a leading provider of corporate foreign exchange, offering insight and guidance to help clients in managing their currency requirements more effectively. Our proprietary technology is at the core of the multi-faceted services we provide our clients. Whether your business requires an one-off transaction or a complex, multi-currency hedging strategy, protecting your bottom line is paramount for us. Global Reach is proud winner of Feefo’s Gold Trusted Service Award.