Financial Markets: Dealing with Uncertainty and Mitigating Risk
Jones Day Partner Brian Trudgen talks about how uncertainties in financial markets can affect client decisions, the Firm’s role in helping those clients mitigate risks, and why shifting market dynamics can often present strategic opportunities.
A full transcript appears below.
I would say that the principle thing that I find keeping clients up at night right now is just the uncertainty. And we've got a whole, whole lot of uncertainty out there right now, on a variety of fronts. And what you find is you find that issues and problems become more complex in a more uncertain environment. If you have a clear vision as to where the markets are going, as to geopolitical stability, then the analysis is much more straightforward.
With every piece of uncertainty, you're adding a variable to that equation. And that's when the answers become a lot more complex as well. The decision tree just becomes more and more complicated. The clients really are coming to us, looking for guidance and to help them determine where the risks are and what the nature and extent of those risks are. And then they make business decisions.
We frame the issues, we advise them as to the risks and concerns. And we give them as much perspective as we can, because we have a lot of it. Just given how active and large our practices are, given how much market information we have, we're able to really help inform those decisions. It is very much serving in the role of counselor ,and advising them on risks and issues, and helping them determine where their comfort level is, and how we can proceed on a basis that mitigates risk to a reasonable point, but doesn't prevent them from exploring, utilizing, realizing opportunities. It is really an interesting and dynamic time, and it's a time when there's a lot of money out there looking for deals.
It's, frankly, remarkable how much money there is. And that's the interesting thing about market dislocations. Be it energy prices or inflation or interest rates, sometimes that creates strategic opportunity for people that are poised to take advantage of it. Debt funds, private equity funds, hedge funds, right? So, what we tend to see with shifting market dynamics are shifting deal types. Business folks are always inventive, right? They're always innovating. And it basically just leads to different types of transactions. And I think the great thing about us is we're capable of executing on any number of different structures and transactions.
