Investment management firms

Investment management firms (who typically manage large accounts on behalf of customers such
as pension funds and endowments) use the foreign exchange market to facilitate transactions
in foreign securities. For example, an investment manager bearing an international equity
portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign
securities purchases.
Some investment management firms also have more speculative specialist currency overlay
operations, which manage clients' currency exposures with the aim of generating profits as
well as limiting risk. Whilst the number of this type of specialist firms is quite small,
many have a large value of assets under management (AUM), and hence can generate large trades.