MARISK, an independent risk advisory firm, has opened its Abu Dhabi office to help companies and other businesses manage the use of over-the-counter derivatives. The firm will provide independent risk assessment, structuring, pricing and execution advice for derivative and structured product transactions.
Marisk’s clients include derivative end-users such as corporations, private equity firms, real estate developers, and family offices with a focus on the MENA region. Companies use over-the-counter derivatives — swaps, options and the like — for a wide range of hedging purposes. Among the most common are exchanging floating-rate interest payments for fixed-rate payments, hedging foreign-currency risk and hedging commodity costs.
While useful in nature, the structure and pricing of derivatives contracts is complex and lacks transparency. Using Marisk to advise or implement a hedging strategy allows clients to make informed decisions that result in better execution and directly impacts their bottom line.
“In a derivatives transaction, the fee is totally embedded and highly opaque. If you don’t know how much you’re paying, you’re going to be paying too much” said Dany Masri, Managing Director of Marisk Consultants and former Treasury & Cash Management Manager at BNP Paribas in Abu Dhabi where he ran the corporate interest rate and foreign exchange derivatives sales.
A recent New York Times article outlined how the multitrillion-dollar derivatives market is dominated by a small group of large banks whose derivatives trades lack transparency. As a result, buyers and sellers may not be getting best prices, according to the newspaper.
“We help our clients combat this natural disadvantage in the marketplace and reduces the unseen fees of such derivatives transactions by creating transparency and competition” Mr. Masri said, adding “With the additional regulation such as the Dodd-Frank Act, dealers will be subject to new capital and margin requirements and it is widely expected that they will pass their own marginal costs onto their clients.”
By providing expertise and negotiating power, Marisk brings transparency to the process of risk management, saving time and money for its clients by helping them analyze risks, review documentation and reduce the costs of new derivatives transactions, modifications or terminations without any conflicts of interest.
Whether swapping a bond issuance or using an interest rate cap to protect against interest rate exposure on debt facilities, Marisk can ensure to lower costs, improve terms and optimize execution with your counterparties.
Marisk is Abu Dhabi based and works to achieve the strategic and financial initiatives outlined in the Abu Dhabi Economic Vision 2030.