TCX Investment Management Company

The Currency Exchange Fund (TCX) is a special purpose fund that provides OTC derivatives to hedge the currency and interest rate mismatch that is created in cross-border investments between international investors and local borrowers in frontier and less liquid emerging markets. The goal is to promote long-term local currency financing, by contributing to a reduction in the market risks associated with currency mismatches. To achieve this objective, TCX acts as a market-maker in currencies and maturities not covered by commercial banks or other providers, notably where there are no offshore markets, no long-term hedging, or, in extreme cases, no markets at all. This activity spans 70 currencies in Sub-Saharan Africa, Eastern Europe, the Middle East & North Africa, Central Asia, South East Asia, and Latin America. TCX is usually unable to hedge itself. The core risk management principle is the risk-reducing effect of running a globally diversified pool of currency exposures. This is supported by a conservative capital base provided by patient investors and donors. TCXs investor base predominantly consists of development finance institutions and microfinance investment vehicles active in the long-term debt markets of emerging and frontier markets. The Fund applies state-of-the-art valuation techniques to track its exposures on a daily basis.