Equity Risk Management

William Blair & Company helps clients structure and execute hedging, monetization, and diversification strategies for concentrated equity positions. Individual shareholders and corporate executives who have a large portion of their wealth in concentrated equity positions, which may be in the form of restricted or low-cost-basis stock, often desire the ability to either diversify, hedge risk, or add liquidity to their portfolio.

We help investors achieve their goals of preserving and enhancing wealth by providing the most cost-effective strategy while focusing on the important issues facing the investor, including taxation, maintaining voting and dividend rights, and regulatory and disclosure issues. By using our network of outside institutions and acting as agent, we obtain multiple bids for competitive pricing and then direct the actual execution of the hedging transaction.

In addition to finding the most competitive price and terms from a wide array of highly rated counterparties, William Blair & Company works with investors, as well as their legal and tax counsel, to educate them on how to compare various structures and evaluate relative risk exposures. Together, we can design strategies to fit the investor’s particular financial situation, taking into consideration specific goals, objectives, and constraints.

Advantages

• Risk Reduction
  Reduce risk and protect the value of the equity position by locking in a minimum price level
   
• Diversification
  Eliminate the concentration risk in the portfolio and create a more balanced portfolio with multiple asset classes
   
• Tax Efficiency
  Postpone the recognition of capital gains taxes that would result from the sale of shares
   
• Liquidity
  Monetize a substantial portion of the equity position by borrowing against its value
   
• Shareholder Benefits
  Retain control and voting rights of underlying shares
   
• Yield Enhancement
  Increase the cash flow from an equity position that provides little or no dividend income

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Concentrated Stock Positions: Managing Risk and Reward (PDF)