Koch, Royal Bank of Canada Form Global Energy Alliance
Greater demand for energy derivative products on the world
market prompted the Royal Bank of Canada to team up with Koch
Industries last week. The powerhouse in the worldwide financial
markets, which handles $30 billion/day in transactions, said the
alliance will provide its clients with direct access to energy
market data and trends, and a broader array of energy derivative
products, such as weather derivatives.
The bank entered the commodity risk management business four
years ago in a modest way and has been building slowly. The
alliance, however, puts the bank's energy risk management program
on the fast track.
"The depth of information you get from being allied with someone
who is in the market is invaluable. We expect to be able to provide
our clients with finer pricing without risk to ourselves because
we're dealing with people who are right in the industry," said a
Royal Bank spokesman.
Royal Bank Chairman John Cleghorn said, "[Koch] has an
outstanding reputation and is a market leader in energy and weather
derivative products. These strengths, when combined with our global
foreign exchange operations, market analysis and financial
engineering capabilities make for a strong, customer-focused
partnership with a highly competitive product offering."
The deal gives Koch a connection to a worldwide collection of
investment clientele. Royal Bank and its subsidiaries serve 10
million clients through more than 1,500 branches and offices
located in 36 countries.
A Koch spokeswoman added the two firms also plan to jointly
produce daily energy market commentary and organize an annual
energy conference. Rocco Canonica
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