In 2007, one analyst was asked in the group of derivatives investment bank Grenfeld & Co., a hedging strategy for Providence Equity Partners (Providence) at Bell Canada Enterprises (BCE Inc.) to develop. Providence was in the United States and any strategy would significant currency risks arising from the conversion of the proceeds into U.S. dollars to participate. The analyst needs to consider a number of long-term hedging strategies that Grenfeld & Co. could recommend Providence. Its vice-chairman … Read more »

In 2007, one analyst was asked in the group of derivatives investment bank Grenfeld & Co., a hedging strategy for Providence Equity Partners (Providence) at Bell Canada Enterprises (BCE Inc.) to develop. Providence was in the United States and any strategy would significant currency risks arising from the conversion of the proceeds into U.S. dollars to participate. The analyst needs to consider a number of long-term hedging strategies that Grenfeld & Co. could recommend Providence. Had asked her Vice President, that they create a hedging strategy by first assuming a 25 percent IRR for the investment and its performance, based on two results at the end of the investment (investment horizon = five years): a zero percent IRR and 25 percent IRR.
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from
Colette Southam,
Ahsen Amir-Ali,
Samir Meghji
Source: Ivey Publishing
7 pages.
Release Date: 6 January 2009. Prod #: 908N23-PDF-ENG
Leveraged buyout (LBO) of BCE. Security Risk Hedging HBR case solution

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