Ep 5: Hedging in Practice: What the Data Is Telling Us
19 April 2026PODCAST
The Validus View
Episode 5
Hedging in Practice: What the Data is Telling Us
Hosted by: Kevin Lester, Co-Founder & Chief Executive Officer
Summary
In this episode of The Validus View, Kevin Lester is joined by Nirvani Sookdeo and Pamela Youssef to discuss how hedging practices are evolving, drawing on insights from Validus’ latest report drawn from data from hundreds of private capital funds.
The conversation explores how managers are approaching key decisions in their hedging programs such as instrument selection, hedge tenor and liquidity management. While FX forwards remain the most widely used tool, the discussion highlights how strategies vary significantly depending on asset class, expected returns and fund structure.
Looking ahead, the episode also considers how structures such as open-ended funds are influencing hedging decisions. With greater focus on FX exposure, real-time data and how hedging programmes are managed, managers are increasingly looking to build more flexible hedging approaches that can adapt to changing market conditions.
Key Highlights
- Hedging is now a core part of portfolio construction, not just a defensive tool
- The impact of FX exposure on returns can vary significantly depending on fund structure, exposure levels and asset class
- FX forwards remain the most widely used hedging instrument due to their cost efficiency, with options used more selectively
- Liquidity risk is a key driver of hedging strategies, particularly in relation to mark-to-market movements and collateral requirements
- Open-ended fund structures are pushing managers toward more flexible, shorter-dated hedging strategies
- Data quality and real-time visibility remain key challenges, with increasing focus on technology-driven solutions
Tune in to the full episode
25 minutes
Who should listen
This episode is relevant for fund managers and investors with cross-border portfolios who are navigating FX exposure as part of their overall investment strategy.
It will be particularly useful for teams across private equity, private credit, real estate and infrastructure, as well as institutional investors and portfolio company teams looking to better understand how peers are approaching hedging in practice.
Behind the Mic: Host & Guests
Kevin Lester
Chief Executive Officer
Nirvani Sookdeo
Global Head of Risk Advisory
Pamela Youssef
Head of Risk Advisory (Europe)