Holistic. Coordinated. Scalable.
Currency risks are a key factor influencing the stability, manageability and profitability of institutional portfolios. Global capital allocations, regulatory frameworks and balance sheet requirements make precise currency management essential. FX Overlay is the established solution for systematically managing these risks – independently of asset management and precisely tailored to the portfolio structure.
7orca develops and implements customised FX Overlay architectures that can be flexibly adapted to the target structure and operational conditions of institutional investors. The mandates combine data-based exposure management, tactical-strategic control and transparent implementation.
We are the partner of institutional investors when it comes to FX risks. According to their individual specifications, we hedge these in customised active and passive currency overlay solutions.
Stability. Control. Value.
Currency fluctuations affect not only portfolio returns, but also the risk budget and regulatory positioning. Without targeted management, unintended risk exposures may arise, creating planning uncertainty or additional complexity in risk reporting.
7orca aligns its overlay strategy fully with the actual exposure structure and applies scientifically grounded, rule-based management mechanisms for ongoing optimisation. An FX Overlay not only reduces risk – it also generates efficiency gains: through cost-effective and efficient implementation, centralised trading processes, and transparent, precise performance attribution.
Specialised. Independent. Responsible.
7orca is one of the few providers exclusively specialised in overlay strategies – with a clear focus on managing the currency risks of institutional investors. The company operates fully independently of banks, brokers and asset managers, and assumes complete operational, strategic and tactical responsibility within an FX overlay mandate.
Implementation is rule-based, evidence-driven and entirely system-supported, built on a proprietary, highly automated infrastructure. 7orca conducts processes in accordance with ISAE 3402 Type II standards, with full documentation. Clients receive not only a solution, but a transparent and auditable hedging architecture that meets regulatory requirements as well as economic objectives.
As an intermediary between the investment management company, the custodian and the broker, 7orca manages the entire hedging process and ensures efficient integration into existing value chains – without creating any additional operational burden for the investor.
Tailored. Methodical. Effective.
7orca offers three clearly differentiated FX overlay approaches – each tailored to the objectives, risk appetite and structure of institutional investors. The strategies can be mandated individually or combined in a modular fashion. At the core of every solution lies precise exposure management, complemented by rule-based control mechanisms.
7orca Passive FX Overlay
Hedge efficiently. Streamline operations. Control risks.
- The Passive FX Overlay approach is suitable for investors who value planning certainty, cost efficiency and operational clarity.
7orca Active FX Overlay
Seize tactical opportunities. Realise asymmetric profiles.
- The 7orca Active FX Overlay is aimed at mandates with flexible control logic and the goal of stabilising and improving risk-adjusted returns.
7orca Holistic FX Overlay
Think holistically. Manage strategically and tactically.
- The Holistic FX Overlay is the comprehensive solution for complex portfolios with a heterogeneous asset structure. It enables free structuring of currency allocation while taking into account customer-specific and regulatory constraints. This FX overlay is managed using strategic and tactical elements.
Centralised. Focused. Optimised.
A single point of contact in currency management consolidates responsibility, streamlines communication and ensures consistent rules across all mandates. With a central FX overlay mandate, 7orca provides aggregated currency hedging across multiple investment managers – creating scale effects and netting advantages while reducing operational risks through a scalable overlay architecture. Separating asset and currency management also facilitates precise control of overall portfolio risks. As an independent currency specialist, 7orca applies rule-based and transparent processes – with centralised execution enhancing both efficiency and traceability in daily management.
Multi-stage. Evaluation-based. Rule-based.
At 7orca, the derivation of the FX overlay strategy is not based on static guidelines, but on a structured and scientifically grounded decision-making process. This takes into account the individual exposure profile, currency-specific characteristics and current market conditions. The objective is consistent, transparent and economically sound management – for each currency, each segment and each mandate.
Exposure management.
The foundation of every FX overlay strategy.
Data-driven. Structured. Consolidated.
An effective FX overlay begins with a valid understanding of the actual currency risks within the portfolio. To achieve this, 7orca establishes an integrated exposure management process that systematically consolidates all relevant data sources – from the investment management company and asset managers through to the investor – validating and aligning them along the way.
The result is comprehensive transparency across all currency positions – regardless of portfolio structure, asset class or investment liquidity. Misallocations are identified, corrected and centrally reconciled, creating a consistent and reliable data foundation for subsequent management.
Key features of exposure management at 7orca
Transparency at single-investment level – including illiquid or non-listed assets
Automated plausibility checks of position data through multi-level control systems
Standardised connections to over 250 asset managers and all leading investment management companies as well as central administrators
Netting across vehicles, segments and levels to reduce operational complexity
Ongoing revalidation of FX exposure within the daily reporting cycle
At 7orca, exposure management is not treated as a secondary process, but as an active component of overlay management. It is the prerequisite for efficient hedging, regulatory compliance and targeted risk allocation.
Investment process.
Tailored hedging solutions.
7orca Passive FX Overlay
A passive FX hedge stabilises portfolios in line with the defined hedging ratio. By outsourcing operational activities and implementing the strategy in an efficient and cost-effective manner, scale effects are achieved that significantly ease the burden on the investor.
- Targeted reduction of currency risks based on a defined hedge ratio
- Use of deviation bands to avoid unnecessary transactions
- Savings in transaction costs through netting across funds, segments and portfolio structures
- Implementation of market-standard benchmarks (e.g. monthly rolling, fixed term, quarterly rollover)
7orca Active FX Overlay
An active FX overlay offers high hedging efficiency and an attractive, asymmetric risk profile – with the potential to participate in rising foreign currency rates while providing protection against adverse market movements.
7orca Holistic FX Overlay
A holistic FX overlay management approach enables the dynamic control of hedge ratios within a broadly diversified currency portfolio, taking into account both the underlying asset portfolio and the individual objectives of the investor.
Linking strategic positions with tactical hedge ratios
FX strategy process to derive a client-specific and optimal currency allocation
Measurability of manager contribution through an agnostic benchmark structure
By combining a structured FX strategy process with tactical management approaches, a flexible and efficiently oriented holistic currency management framework is achieved.
Implementation.
Planned. Efficient. Smooth.
Clear processes. Technical depth. Operational security.
The implementation of an FX overlay mandate at 7orca follows a proven, tightly managed project plan. The objective is to establish a fully integrated hedging architecture within a matter of weeks – regulatory compliant, operationally robust and tailored to the specific mandate structure.
Mandate structuring
The mandate structure provides for the centralised management of all FX risks within a dedicated FX overlay segment – with the aim of ensuring optimal implementation, centralised control and minimal operational effort for the investor.
Implementation project
FX overlay solutions are implemented within a structured project framework – ensuring a smooth and efficient mandate set-up.
Best execution
Execution quality is a key driver of overall FX overlay performance. That is why we put a strong focus on the execution process.
Instrument selection
7orca is unrestricted in its choice of hedging instruments and applies those that are most efficient within the prevailing framework.
Counterparty management
The monitoring and management of counterparty risk is a key component of our FX overlay management.
Clients incur counterparty risk with FX brokers when entering into forward contracts, as significant market value fluctuations can give rise to default risk.
7orca manages these risks on an ongoing basis, provides advisory support to investors, and performs comprehensive broker due diligence annually.
Liquidity management
7orca’s liquidity management ensures funds are always available for margin calls and hedging transactions. Daily portfolio valuations and CFaR forecasts provide early visibility and control of liquidity needs.
Monitoring regulatory limits
7orca automatically monitors regulatory limits such as the 20% ratio under AnlV or Solvency II requirements on a daily basis. By specifically comparing balance sheet thresholds and regulatory limits, risks are identified early and actively managed.
Client-specific requirements – for example under IFRS or the German Commercial Code (HGB) – are directly integrated into the hedging strategy and continuously monitored. This not only ensures compliance with legal regulations, but also helps to deliberately reduce potential balance sheet pressure.
The benefit for institutional investors: maximum transparency, regulatory relief and an FX overlay solution that remains consistently on course – both operationally and in terms of regulatory compliance.
Reporting & transparency.
Data clarity enables effective decision-making.
Clarity. Relevance. Governance
Transparency is a key success factor in institutional currency management. 7orca provides its clients with fully integrated reporting – tailored to regulatory requirements, internal processes and individual analysis needs. The reports highlight the risks, decisions and value contributions of the FX overlay mandate – on a daily, weekly or monthly basis.
By fully mapping all hedging positions at currency, segment and strategy level, it is possible to see at any time how the FX overlay affects earnings, risk and balance sheet structure. The reporting is generated directly from our own system architecture and can be flexibly integrated into existing IT and controlling structures.
Performance features of FX overlay reporting at 7orca
- Daily, weekly or monthly delivery – tailored to the requirements of the mandate.
- Granular evaluation by currency, strategy component and asset category.
- Clear separation of earnings contributions from overlay and investment – basis for traceable performance attribution.
- Transparent presentation of hedge ratios, remaining maturities and the development of exposures.
- Optional: simulations, stress tests and cash flow projections.
All reports can be structured in accordance with regulatory requirements such as AnlV, Solvency II or CRR and supplemented with individual reporting sections – including visualisations, PDF packages or database-based interface integration.
Further Information.
Context. Process. Benefit.
FX overlay – systematic management of currency risks
Foreign currency risks are an often undesirable but unavoidable side effect of an internationally diversified portfolio.
In our NEWS & INSIGHTS section, we provide you with an overview of how currency risks can be managed using FX overlay strategies.
Exposure at a glance.
Key figures. Reach. Networking.
7orca's FX overlay mandates are based on sound, globally oriented exposure management. This approach enables institutional investors to precisely manage currency risks and link existing strategic positions with tactical hedge quotas. The following key figures demonstrate 7orca's international reach and institutional network: broad currency coverage, active monitoring of a wide range of investments and established interfaces with leading asset managers worldwide. They illustrate the operational basis on which 7orca implements efficient currency management – independently of asset management and precisely tailored to the respective portfolio structure.
60
Currencies
Economic management with global reach
774
Investments
Active currency review of a wide range of investment solutions
309
Asset Managers
Established interfaces with leading market players
22
mandates
Number of FX overlay mandates managed by 7orca
6
bn EUR
7orca manages client assets ranging from EUR 32 million to EUR 6.3 billion.
Successful together.
Trust. Dialogue. Partnership.
7orca makes institutional currency risks manageable – independently, data-based and with a high degree of implementation depth. Whether it's an initial orientation meeting, concrete mandate planning or an individual simulation of your exposure: our FX overlay specialists are available for an in-depth discussion.
Next steps
- Get an overview of the mandate architecture
- Request a simulation of the impact of your FX exposure
- Evaluate strategic overlay components together
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