Brief Business Profile:
Institutional clients regularly include Commodities into their portfolios. Whenever they do, the business is either high volume or bespoke and profitable. RD is experienced in commodities products for institutional clients and has a track record with sovereign funds, asset managers and pension funds, particularly in Australia and South East Asia .
RD’s work would include educating asset managers about client commodities products and creating bespoke indices to hedge specific portfolio risks. For example, the largest Australian investor focuses on hedging geopolitical event risk with commodities. Another investor has hedged inflation.
RD would also negotiate optimal pricing for vanilla solutions and aim to capture maximum client wallet by providing excellent value-added service. For example, asset managers and pension funds have focused on reducing vanilla product fees in 2015. RD helps clients to optimise execution pricing.
Services / RD Contribution:
Create ANALYSIS addressing defined questions on specific Commodity markets
For example, reporting on liquidity and optimal execution hours for a set of Commodities that are considered for inclusion in a client portfolio product.
Deliver concrete plan / suggestions on specific DEAL EXECUTION in Commodities
For example, you might be working on a significant Commodities hedging transaction with many moving parts, which requires optimal pricing and you need to control a pool of price providers as well as structure the account opening, tender timing, allocation of volumes and other practical variables that have direct impact on the price you are able to achieve.
Deliver EDUCATION sessions on specific Commodity markets, including Fundamentals and practical Execution
For example, you run an Equities portfolio and would like to hedge out some underlying Commodities risk but you are not well-versed in the specific market dynamics.
Create specific BUSINESS PLANS for Commodities-related physical and financial businesses
You might own physical commodities and think about expanding in Asia or have a fund / derivatives business looking to add revenue in Asia.
Advise on OPTIMISING execution in Commodity markets
We have been executing transaction day-in-day-out in different idiosyncratic Commodities markets for many years. As such, we understand the specialisation and quality of each price provider in the market. The timing and quality of execution (slippage) are some other important parameters that we help to get right.
Review and SELECTION of relevant Commodity products
Not all Commodity products are created equal. Having worked inside teams where commodity products are “forged”, we understand the nuances and questions to ask when considering a product for portfolio inclusion.
We have practical experience with the premises on which Commodity products are based: such as market arbitrage conditions, liquidity conditions and curve dynamics (backwardation/contango).
Regional Expertise:
