7orca FX Overlay – targeted management of foreign currency risks.
Analysing exposure, implementing hedging transparently.
Understanding exposure, defining hedge ratios, controlling implementation.
Institutional portfolios contain foreign currency risks across liquid and illiquid assets, fund structures, managers and asset classes. The decisive factor is not the fund currency, but the actual economic FX exposure in the context of the overall portfolio – and this is often not fully captured.
7orca FX Overlay establishes an institutional management framework for this purpose: from FX look-through and exposure determination to the definition of suitable hedge ratios, implementation, liquidity management, best execution and transparent reporting.
This turns currency management from a by-product of international investments into a defined component of institutional portfolio management – with a clear separation between asset and currency management.
Analysing FX exposure, establish the basis for hedging.
FX exposure management as the starting point for every FX Overlay solution.
The effectiveness of FX hedging depends directly on the robustness of the underlying exposure assessment. 7orca analyses and consolidates economically relevant FX exposures across fund structures, asset classes, investment managers and liquid and illiquid assets.
This establishes the basis for hedge ratios, implementation, liquidity management and reporting within an FX Overlay mandate.
Individual. Methodical. Effective.
7orca offers three clearly differentiated FX Overlay approaches – each aligned with the objectives, risk appetite and structure of institutional investors. These approaches can be mandated individually or combined within an overarching currency architecture. Each solution is based on precise Exposure Management, supplemented by rules-based management elements.
7orca Passive FX Overlay
Efficient hedging. Reduced effort. Controlled risks.
- For investors that value planning certainty, cost efficiency and operational clarity.
7orca Active FX Overlay
Dynamic management of hedge ratios. Enabling asymmetric profiles.
- For mandates with flexible management logic and the objective of more stable risk-adjusted returns.
7orca Holistic FX Overlay
Holistic perspective. Strategic and tactical management.
- For investors seeking to assess and manage currency risks within the overall portfolio, Holistic FX Overlay combines the derivation of an underlying benchmark, the strategic hedge ratio for each currency and tactical risk management in the context of the underlying asset portfolio.
Finding guidance,
selecting the right approach.
| Passive FX Overlay | Active FX Overlay | Holistic FX Overlay | |
| Management logic | Defined hedge ratio, implemented statically | Dynamic hedge ratio relative to a benchmark | Strategic and tactical management in a portfolio context |
| Suitable for | Planning certainty, cost efficiency, operational clarity | Market-adaptive management, asymmetric profile | Complex, heterogeneous multi-asset portfolios |
| Market view | No active positioning | Systematic, model-based | Strategic and tactical |
Why the reported currency is not sufficient.
In Private Assets, the reported fund currency may only provide an incomplete view of the economic FX exposure. The specialised 7orca FX look-through analysis makes these relationships visible and creates the basis for integrating Private Asset structures into currency steering in a mandate-specific way.
Holistic FX Overlay for a
complex multi-asset portfolio.
An ongoing FX Overlay connects Exposure Management, hedge ratios, implementation, liquidity management, Best Execution and reporting within an institutional mandate framework.
The case study shows how currency risks in a complex multi-asset portfolio can be assessed strategically and tactically and translated into a holistic FX Overlay structure.
We support institutional investors in managing their currency risks in a structured manner – in line with individual requirements and through both active and passive FX Overlay solutions.
Institutionally integrated, systematically steered.
A central FX Overlay consolidates currency risks across mandates, vehicles and asset classes. This streamlines interfaces, creates consistent rules and unlocks structural efficiency benefits such as netting, centralised liquidity management and clearer performance attribution.
At the same time, it sharpens the separation between asset management and currency management: the allocation of assets remains with the underlying investment, while foreign currency risks are steered within a dedicated, specialised overlay structure.
For institutional investors, this means greater transparency, reduced operational friction and clearer governance.
Rule-based. Efficient. Transparent.
An initial exchange enables institutional investors to:
- have existing currency risks and hedging structures assessed,
- evaluate potential overlay approaches in the portfolio context,
- and gain a clear view of reporting, transparency and implementation.
