Derivatives consultant offers non-profits a helping hand

012411 frost
Joyce Frost

(updated with correction)

If credit-default swaps, total-return swaps, credit options, structured CDS, first-to-default baskets, bespoke tranches, and CDOs and CLOs are Greek to you, and you work for a non-profit, you're in luck.

Independent derivatives consultant Riverside Risk Advisors LLC, New York, is offering pro bono services to museums, universities and other non-profit organizations, confirmed Joyce Frost, a Riverside partner in an interview.

Many non-profits use derivatives, but negotiating derivatives contracts is complicated.

“By allowing greater flexibility in the management of credit, interest-rate and other risks, derivatives serve an important role in the capital markets. A potential problem arises, however, when one side of the transaction ... is very sophisticated ... while the other side is not. Unsophisticated consumers of derivatives often have no one to represent them when they enter into or terminate a contract,” Ms. Frost said.

Riverside's partners decided to offer free advice to non-profits on a case-by-case basis, at the rate of about one per month, Ms. Frost said.

“Our primary clients are for-profit corporations, and I love the idea of being able to lend our expertise to the non-profit world,” Ms. Frost said.