HedgeStar

What HedgeStar does

HedgeStar is an independent financial instrument valuation and hedge accounting services firm founded in 2004 (originally as DerivActiv) and headquartered in Minneapolis, Minnesota. The firm provides outsourced hedge accounting, fair value measurement, and derivatives valuation services to financial institutions, corporations, audit firms, and tax-exempt entities, with compliance coverage across ASC 815, ASC 820, IFRS 9, IAS 39, and GASB 53/72/87 standards. Its technology platform includes proprietary effectiveness testing methodologies (regression analysis, dollar-offset method, Portfolio Layer method under ASU 2017-12), automated SOC 1-certified report generation, a cloud-based client portal for mark-to-market and cash flow report delivery, and integrations with LSEG, Kyos, and Hedgebook for market data and risk analytics.

The company's revenue model combines subscription-based outsourced valuation services (reports delivered at frequencies from daily to annual) with professional services engagements for hedge documentation, effectiveness testing, journal entries, and regulatory reporting. Pricing is quote-based and custom, structured around multi-year enterprise contracts. Distribution is direct enterprise field sales supported by an "Expert Consultation" booking system, content marketing through HedgeStar University (NASBA-eligible CPE training, webinars, eBooks), and channel partnerships with Corpay Cross-Border Solutions and GPS Capital Markets for FX execution bundling. The firm is owned by Tril 1 LP, which also controls affiliate Blue Rose Capital Advisors (derivatives execution, Municipal Advisor registration, CTA registration). HedgeStar serves over 400 global clients managing more than $100 billion in notional under management.

Name

HedgeStar

Legal name

HedgeStar, Inc.

Website

https://hedgestar.com

Company type

Private

Founded year

2004

Operating status

Operating

Headcount range

11–50 employees

Short description

HedgeStar is an independent financial instrument valuation and hedge accounting services firm serving 400+ financial institutions, corporations, audit firms, and tax-exempt entities with ASC 815/IFRS 9/GASB-compliant outsourcing solutions.

Ownership category

akta.pro rank

Product category

Financial Advisory Services

NAICS

Portfolio Management and Investment Advice (52394)

SIC

Investment Advice (6282)

akta.pro primary industry

Pricing & Valuation Services (Fixed Income, OTC, Derivatives) (FSAFAIAF)

Keywords

• Hedge accounting services
• Financial instrument valuation
• Derivatives valuation
• Fair value measurement
• Hedge effectiveness testing

Headquarters

HQ city

Minneapolis

HQ country

United States

HQ region

North America

Offices4 records

Markets served

GTM type

B2B

Offering type

Services

Cost components

Personnel, Operations, Technology or R&D, Marketing or Sales, Infrastructure

Revenue model

1. Outsourced Valuation Services: Independent financial instrument valuation services provided on subscription basis with reports delivered at frequencies from daily to annual. SOC 1-certified process delivers audit-ready valuations to clients.
2. Hedge Accounting Services: Independent hedge accounting services including documentation, effectiveness testing, journal entries, and reporting. Delivered as outsourced professional services to financial institutions, corporations, and tax-exempt entities.
3. Training and Education: HedgeStar University provides derivative accounting training, CPE credits through NASBA, workshops, on-site training, and webinars. Customized programs delivered by CPAs and industry professionals.
4. Derivatives Execution Advisory: Tailored derivatives execution advice including ISDA documentation review, interest rate risk management strategies, and competitive pricing coordination. Provided through affiliate Blue Rose Capital Advisors.

Pricing tiers

Go-to-market motion2 records

Distribution channels4 records

Marketing channels5 records

Core offering

HedgeStar provides independent financial instrument valuation and hedge accounting services to organizations that use derivatives for interest rate, foreign exchange, and commodity risk management. Its offerings cover outsourced hedge accounting documentation and effectiveness testing under ASC 815, IFRS 9, and GASB standards, mark-to-market and fair value valuation across all three fair value hierarchy levels, FX hedging strategy and reporting, derivatives execution advisory, and related risk management consulting.

Product overview

HedgeStar is an independent financial instrument valuation and hedge accounting services firm founded in 2004. The company operates a platform-plus-services model offering four core service lines — Hedge Accounting Services, Financial Instrument Valuation Services, FX Services (via Corpay partnership), and Derivatives Execution Services (via affiliate Blue Rose Capital Advisors) — supported by three add-on advisory modules: Financial Risk Management Consulting, Treasury Software Advisory, and Financial Litigation Support. A complementary training arm, HedgeStar University, delivers workshops, webinars, and educational content including the ABCs of Interest Rate Risk Management eBook. The company serves four primary sectors: Financial Institutions, Corporations, Audit Firms, and Tax-Exempt Entities, adhering to accounting standards including ASC 815, ASC 820, IFRS 9, IAS 39, GASB 53, GASB 72, and GASB 87.

Differentiator

Problem solved

Functional benefit

Products and services

• Hedge Accounting Services Full-service hedge accounting outsourcing covering ASC 815 and IFRS 9 compliance, including hedge designation memoranda, effectiveness testing (regression analysis, dollar-offset, scenario analysis), journal entries, regulatory and stakeholder communication, and audit-ready reporting for financial institutions and corporations.
• Financial Instrument Valuation Services Independent mark-to-market and fair value assessments for financial instruments across Level 1, 2, and 3 of the fair value hierarchy. Covers derivatives, municipal bonds, foreign debt, illiquid securities, structured products, and cryptocurrencies, adhering to ASC 820, IFRS 13, and GASB 72.
• FX Services Foreign exchange hedging strategy and execution support delivered in partnership with Corpay Cross-Border Solutions. Covers FX hedge designation memo preparation, effectiveness testing, hedge accounting reports, general ledger reporting, and scenario analysis aligned with global accounting standards.
• Derivatives Execution Services End-to-end derivatives execution advisory provided by affiliate Blue Rose Capital Advisors. Includes ISDA documentation review and negotiation, interest rate risk management strategy evaluation, competitive pricing coordination, and benchmarking against internal models. Covers interest rate swaps, futures, options, and exotic derivatives.
• Financial Risk Management Consulting Enterprise risk management framework design covering governance setup, risk scorecard development, process/risk/control mapping, risk policy development, evaluation of existing risk management programs, and custom stakeholder training on derivatives and hedging.
• Treasury Software Advisory Services Advisory service guiding clients through treasury and risk management software selection via RFP process, system tailoring, implementation, and staff training.
• Financial Litigation Support Services Expert witness and litigation support for market manipulation, fraud, and market anomaly cases, including forensic assessment, quantitative analysis, instrument valuation, and deposition preparation.
• HedgeStar University Expert training and education program covering risk management strategies, derivative valuation techniques, and accounting for derivatives. Delivered through on-site training, multi-day workshops, webinars, and a library of articles, white papers, eBooks, and toolkits. Instructors include CPAs and industry professionals with over 75 combined years of experience.

Quantifiable outcome

• ABC Depository achieved 92-96% hedge effectiveness ratios, generating $1.2M in offsetting hedging gains
• +2 more outcomes

Named customers2 records

Segments4 records

Ideal customer profiles3 records

Technology focussed No

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Integration4 records

Feature5 records

Partnerships

Three partnerships are on record, tiered core.

• GPS Capital MarketscoreStrategic or Co-development Partner · 11 November 2024GPS Capital Markets provides premier foreign currency (FX) strategy services including balance sheet hedging, cash flow hedging, intercompany netting, and cross border payments. HedgeStar provides hedge accounting and FX accounting support to clients referred through the partnership. Partnership announced November 2024.
• Corpay Cross-Border SolutionscoreStrategic or Co-development PartnerCorpay develops FX hedging and risk management strategies including cost/benefit analysis and implementation support. HedgeStar handles the accounting and reporting side including hedge designation memo preparation, effectiveness testing, and general ledger reporting. Partnership provides comprehensive FX strategy and hedge accounting services.
• Blue Rose Capital AdvisorscoreOEM/ Whitelabel/ Licensing PartnerBlue Rose Capital Advisors is an affiliate of HedgeStar under common ownership (Tril 1 LP). Provides derivatives execution services including ISDA documentation, interest rate risk management strategies, and competitive pricing coordination. Registered as Municipal Advisor with SEC, MSRB, CFTC, and NFA.

Scale indicators4 records

Recent moves6 records

Expansion highlights5 records

Direct peers

• Chatham Financial: Chatham is the largest independent advisor in interest rate hedging, commodity hedging, debt advisory, and hedge accounting—HedgeStar's most direct scaled competitor across all four core services. Both firms sell independent, auditor-accepted derivative valuations and hedge effectiveness testing.
• HedgeTrackers: HedgeTrackers is a direct competitor in outsourced hedge accounting and derivative valuation services for ASC 815/IFRS 9 compliance, and was a prior employer of HedgeStar Senior Manager Joe Nadjar. The two firms compete for the same financial institution and corporate treasury wallet share.
• Validus Risk Management: Validus provides independent FX and treasury risk advisory plus hedge accounting support for corporates and financial institutions. It overlaps with HedgeStar's FX and corporate hedging practices and competes for the same outsourced hedging program engagements.

Broad incumbents

• PwC (Advisory): PwC's Risk and Regulatory practice includes hedge accounting advisory and derivative valuation teams and absorbs work from audit mandates. Former HedgeStar Managing Director Tim Potter's PwC background is direct evidence of the talent pipeline overlap between these firms.
• Ernst & Young (EY): EY's Financial Accounting Advisory Services include hedge accounting compliance and derivative valuation advisory. As one of the Big 4, EY is a scaled competitor with greater bench depth that can absorb HedgeStar-style mandates at large enterprise clients.
• KPMG (Audit & Advisory): KPMG's audit and advisory practices provide ASC 815/IFRS 9 hedge accounting support and derivative valuation services. While broader in scope, KPMG competes directly with HedgeStar for hedge effectiveness testing and fair value measurement work at mid-market and large enterprises.
• Deloitte (Advisory): Deloitte's audit and risk advisory practices offer ASC 815 and IFRS 9 advisory alongside audit services. The full-service Big 4 delivery model competes with HedgeStar for outsourced hedge accounting work and can bundle advisory with existing audit relationships.

Others

• Kyriba: Kyriba offers treasury management software with exposure management and hedge accounting modules. While it intersects with HedgeStar's treasury advisory and risk management consulting products, Kyriba is primarily a software platform that HedgeStar positions around rather than directly competes with.
• Numerix: Numerix provides derivatives pricing and analytics infrastructure that underpins many independent valuation engines. It is adjacent rather than directly competitive: Numerix sells analytics and infrastructure to firms like HedgeStar rather than competing for the same outsourced accounting engagements.

Emerging players

• Hedgebook: Hedgebook is a SaaS-based hedging and risk management platform with audit-trail and effectiveness testing capabilities that overlap with HedgeStar's technology-influenced service delivery. Hedgebook is also listed as a HedgeStar product partner, indicating an indirect go-to-market relationship.

Market position

Strengths5 records

Weaknesses5 records

Competitive moat6 records

Key risks6 records

Key highlights6 records

Customer concentration

• YouTubeyoutube.com/watch?v=tqoAfhcSPys
• LinkedInlinkedin.com/company/derivactiv

Compliance1 record

Revenue estimate

Valuation estimate

Number of profiles

Profiles9 records

Subsidiaries1 record

Funding overview

Funding rounds

Investors

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about HedgeStar