Private Markets FX Hedging Calculator for Institutional LPs
Test how exchange rates and hedging change foreign-currency calls, cash returned and returns. For pensions, endowments, family offices and funds of funds.
Questions this calculator answers1. If a private equity fund’s currency falls by 10%, how much would our investment be worth in our home currency?2. If we hedge half our currency risk, how much would we keep after hedge costs?3. How would exchange-rate changes affect the cash we pay into funds and get back?
Currency impact on returns
The model converts future calls and cash returned using your chosen FX path. For hedged cash flows, it uses the forward rate and cost you enter.
MOIC change from currency
0.00x
USD MOIC is 2.00x versus 2.00x in fund currency; FX gain / loss −$0m.
Base-currency value under FX scenarios
Compare total cash returned in your base currency, with and without your chosen hedge.
UnhedgedHedged
Investment and FX return contribution
To find the FX contribution, subtract fund-currency MOIC from base-currency MOIC.
Investment returnFavorable FXAdverse FX
Hedged and unhedged cumulative cash flow
Calls are negative and distributions are positive in the LP's base currency.
UnhedgedHedged
How the forecast works
For each future call and cash payout, the FX rate gives base-currency units per fund-currency unit. The unhedged share uses the spot rates you choose. The hedged share uses your forward rate and hedge cost. Past paid-in capital uses the rate today. This tool does not collect the FX rate for each past call date.
Frequently asked questions
How is the FX rate quoted?
As base-currency units required for one unit of the fund currency.
Why translate historic paid-in at today's rate?
The tool does not collect the FX rate for each past call date. Using the rate today is a simpler approach.
Does hedging remove all FX risk?
No. The model uses the hedge share, forward rate and cost you enter. The share without a hedge still has FX risk.