Northern Trust Expands Dynamic Currency Hedging Through Collaboration With Berenberg | LeapRate

Northern Trust has broadened its dynamic currency-hedging capabilities by adding models from Berenberg, giving institutional clients access to artificial-intelligence-driven strategies for managing currency risk.

The enhancement allows Northern Trust’s clients to incorporate third-party approaches, such as Berenberg’s AI-based foreign-exchange models, into its framework for adjusting hedge ratios in real time. 

The firm said this expanded optionality is designed to reduce volatility and support improved risk-adjusted returns for asset owners and asset managers across the US, UK, Europe, Australia and Canada.

Marcus Fernandes, global head of currency management at Northern Trust, noted that clients are increasingly seeking innovative tools amid rising market volatility. “With dynamic currency hedging, we’re offering clients greater optionality when it comes to currency management,” he said.

Berenberg, one of Europe’s oldest banks, has developed proprietary FX alpha and risk models aimed at capturing market signals to support dynamic hedging strategies. The collaboration will make these models available to a broader institutional investor base.

Nico Baum, Berenberg’s head of solutions, said the firm is “excited to collaborate with Northern Trust” and noted that its AI-driven approach is designed to help investors make more informed decisions in an environment that is “increasingly technology driven and complex.”