Spotlight on Toby Goodworth, Managing Director, Head of Liquid Markets, bfinance
Global Thought Leader Spotlight
Toby Goodworth, Managing Director, Head of Liquid Markets, bfinance
In my role as the Head of Liquid Markets at bfinance, I am responsible for overseeing all investment research activity within the firm’s Liquid Markets division, spanning global equity, fixed income and diversifying strategies research.
For the last 13 years at bfinance I have focused specifically on liquid alternative assets, supporting our clients in allocating to hedge funds and other liquid, non-traditional strategies including FX overlays and tail risk overlays.
I am also a member of the firm’s Senior Management Team, helping ensure bfinance stays at the forefront of providing our clients across the globe with tailored, independent, investment advisory and implementation support across all asset classes. To date we have advised clients in 47 countries on allocations totalling A$470+ billion.
Challenging global macro conditions
Since the end of the zero-interest rate policy period, investor portfolios globally have undergone a significant regime change, in terms of the currency risks they are now exposed to. Currency overlay has re-emerged as a critical portfolio tool against a backdrop of increasingly more challenging global macro conditions.
The current environment has restored meaningful dispersion in interest rates, reigniting the potential to add value from active currency management, including well-established FX risk premia, which had seen a somewhat subdued opportunity set for more than a decade.
This shift has exposed the limitations of static hedge ratios and simplistic model frameworks, many of which failed to protect portfolios during recent periods of sharp currency swings or failed to adequately respond to trends not commonly seen, such as the recent period of USD weakness.
Investors who once viewed FX as a secondary risk or purely an admin/operations function are now reassessing their approach, recognising that passive or simple, mechanically applied hedges no longer offer sufficient resilience in today’s environment.
As volatility and policy uncertainty rise, driven by shifting rate expectations, unpredictable political cycles, and trade related disruptions, active overlay strategies are becoming more compelling. The ability to adapt hedge ratios in response to medium- to longer-term macroeconomic trends can offer investors both improved downside protection as well as the potential to capture uncorrelated return streams. This has fuelled a trend toward outsourcing FX risk management to specialist providers, with investors often acknowledging that in-house or rule-based approaches often lack the sophistication needed to navigate the new regime.
Implications for sophisticated investors
In short, currency risks can no longer be ignored. Even if your approach to currency management worked in the past, it is highly likely to now be less fit for purpose in an era shaped by heightened geopolitical tensions and macroeconomic uncertainty.
We encourage asset owners to, at the very least, review their FX policy and strategic hedging decisions and act to re-underwrite or evolve their approach to FX management to make it fit for the current environment.
With an increasing need for outsourced FX management this raises governance and oversight requirements: understanding manager philosophy, model construction and implementation, data flows, risk controls and, not least, commercial competitiveness around fees and costs, all of which are crucial when selecting a strategic FX overlay partner to navigate and add value in a more complex FX landscape.
Looking forward, the opportunity set for active overlays remains buoyant as macroeconomic uncertainty and geopolitical tensions look set to remain a key driver of markets in the near to medium term and, in particular, the pro-cyclical nature of the Australian dollar make this a very pertinent issue for AUD-based investors currently.
Toby will be presenting at Global Investment Institute’s upcoming Family Office Investment Forums, taking place on Tuesday, 12 March 2026 in Sydney CBD, New South Wales and Thursday, 19 March 2026 in Melbourne CBD, Victoria. To register your interest in attending, click here or for more information email zlatan@globalii.com.au.
Toby Goodworth, Managing Director, Head of Liquid Markets, bfinance
Toby Goodworth is Head of Liquid Markets at bfinance and a member of the firm's Senior Management Team.
Previously, he was Head of Risk Management and a member of the Investment Committee at Key Asset Management, one of Europe's oldest fund of hedge funds. He has 23 years of industry experience, including over 20 years as an allocator within the hedge fund industry.
Toby holds a PhD in Physics from University College London and a First Class honours degree in Physics, also from UCL.
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