• Cost transparency for currency transactions
• Identification of potential savings
• Validation of current FX execution setups
• Basis for negotiations with existing service providers

Many FX execution setups contain hidden trading costs and unnecessary fees. This is especially true when, for reasons of operational simplicity, currency transactions are processed exclusively via a counterparty such as the client’s principal bank or custodian. The institution’s market influence and its awareness that it is the only counterparty can result in currency transactions being executed at terms that are unfavourable to the client.

Often the cost block is not transparent, because investors have little access to price comparisons or the figures available fail to reflect the market. Quaesta Capital investigates and analyses currency transactions and draws up a detailed report stating whether transactions have systematically been carried out to the client's disadvantage or executed at market prices.

Quaesta Capital’s Transaction Cost Analysis includes:

• Price comparison
  - Exchange rates applied to each transaction
  - Comparison with rates traded on the interbank market at the time of the transaction

• Liquidity analysis
  - Liquidity cycle: Currency pairs move in different liquidity cycles.
    We investigate how transaction execution plays out in phases of high or low liquidity.
  - Execution cycle: Depending on the size of the transaction, it may be worthwhile spreading               execution out over a longer time horizon. This analysis focuses on the positive impact of dividing up   in this way, and of the time weighting.

Execution cycle: Depending on the size of the transaction, it may be worthwhile spreading execution out over a longer time horizon. This analysis focuses on the positive impact of dividing up in this way, and of the time weighting.

• Transparency regarding the performance of currency transactions
  The costs of currency transactions can be significant and represent a negative source of alpha – especially when the market environment allows for only minimal outperformance.
  Transparency helps to lower those costs. Quaesta Capital’s Transaction Cost Analysis highlights targeted improvements that can lead to substantial savings.

• Responsibility to investors and beneficiaries
  Asset managers are obliged to avoid unnecessary costs. Transaction cost analysis enables them to make sure they are complying with this requirement by ensuring that investors’ assets are managed in a cost-effective manner.

• Regulatory requirements (best execution)
  Asset managers are obliged to act in the best interests of their clients. That is their regulatory duty, and it also applies to currency transactions. For this reason, Quaesta Capital advises asset managers to have currency transaction processes reviewed and optimized at regular intervals.