NYAIR Episode 34
Total Return Swaps & How Investors Can Use Them to Boost Returns
This NY-AIR episode offers a masterclass on Total Return Swaps—what they are, how they enable exposure without capital lockup, and why they matter to today’s alternative investors. Industry insiders walk through practical benefits, pricing dynamics, and risk implications, plus actionable use cases for hedge funds, asset managers, and institutional portfolio strategists. Packed with practical examples and best practices, it’s essential listening for professionals seeking new levers in return generation.
Featured Guests
John Dukich
Founder, President & CEO, Pharrell Systems
A trailblazer in financial derivatives solutions, John Dukich brings decades of quantitative and systems innovation to the world of trading, analytics, and risk management. As a CPA-turned-technologist, John’s career has spanned the full scope of cash and derivative markets, including orchestrating some of the first interest rate swaps and founding Pharrell Systems to bridge software with capital markets execution. His expertise is rooted in building robust solutions for portfolio modeling, collateral management, risk frameworks, and integrated analytics for financial institutions globally.
Key Insights From This Episode
What Makes a Total Return Swap Different
Gain economic exposure to assets without a capital outlay, recording P&L instead of the asset itself on your books—ideal for liquidity, hedging, or off-balance-sheet strategies.
Valuation, Margin, and Accounting Dynamics
Total Return Swaps offer flexible exposure, but come with complex margining, collateral requirements, and accounting for both financing and asset legs. Understanding regulation and processing is key for compliance and performance.
Use Cases Across the Investment World
From hedge funds to commercial banks, dealer desks, and even corporates, TRSs support efficient portfolio hedging, tactical leverage, balance sheet optimization, and risk distribution—unlocking sophisticated investment strategies.
Risk Management & Regulatory Impact
Counterparty risk, margin requirements, tax treatment, and OTC construction require robust systems and controls. Best-in-class firms blend technology, expert analysis, and disciplined execution.
Practical Tips for TRS Success
Know your collateral models, work closely with compliance and accounting, and model scenarios across asset classes, margining regimes, and multi-currency setups. The edge is in informed implementation, not just product access.
Access the Full Conversation
Unlock the audio episode and download a custom insights deck. This conversation delivers frameworks, modeling tips, and tech guidance for portfolio managers, risk officers, and professional allocators exploring the full potential of Total Return Swaps.
Soundbites Worth Saving
“Total Return Swaps give you the economic exposure without moving the asset or capital—a strategic tool when liquidity and risk management matter most.”
— John Dukich
“Be ready for the margining and capital requirements: smart TRS users blend front-end opportunity with back-end precision in collateral management.”
— John Dukich
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