For this Company Spotlight, we interviewed Mobius Risk Group’s Vice President, Corporate Strategy and Development (Drew Lichter). Mobius Risk Group is an independent commodity and energy risk advisory and technology firm that blends technology, robust data and analytics, and bespoke commodity risk strategies to manage the potential risks and opportunities for corporations. For more information on Mobius, please visit www.mobiusriskgroup.com.

Background: Mobius Risk Group was founded in 2002 with the goal of providing corporations access to the same information and type of advice that is available to energy merchants, banks, and hedge funds. Given Mobius’ team has a background in physical or financial trading, structuring, marketing, or commodities analysis they can provide clients with the necessary information to properly price and structure their physical offtakes, marketing agreements, and hedges without any conflicts of interest. Mobius’ intelligent solutions for energy and commodity impacted businesses include advisory services for both financial and physical transactions all powered by its RiskNet ”system of intelligence” platform. Mobius was named Energy Risk Magazine 2021 Data and Analytics House of the Year and 2022 Commodities Research House of the Year.

Value Proposition: Mobius’ RiskNet platform and advisory offering is unique compared to other commodity trading risk management (CTRM) solutions due to the following differentiators:

Built for Corporations: Unlike many other CTRM solutions that are focus on the financial services industry, Mobius’ platform is built from the bottom up to help corporations better understand how their commodity price risk affects their entire organization down to the asset level. By integrating an organization’s real-time financial and operational data with market pricing, RiskNet visualizes the company’s revenue and expenses impacted by commodities at the portfolio level or in facility-specific detail.
Dynamic Dashboard: RiskNet acts as an organization’s command center, connecting its real-time transaction data to financial and credit objectives for seamless, up-to-date financial and operational reporting, analytics, and data management to accelerate informed decision-making. Visualizations include cash flow forecasts, credit and counterparty capacity tracking, forward and historical market pricing, financial hedge positions, financial statement metrics, and risk analytics.
Executive-Level Decision Support: Unlike other risk advisory teams (including well-known consulting firms), Mobius’ advisory team has an extensive background and expertise in commodity and derivative trading to provide non-conflicting decision support that is only matched by the experience and knowledge of traders that trade for themselves rather than provide advice to others.
Technology Informed by Experience: Further, Mobius has integrated their team’s risk management expertise into M-Risk, an improved risk visibility platform compared to legacy risk management tools (Value at Risk and Potential Future Exposure). For example, M-Risk utilizes 5-10 years of historical data to simulate prices forward thousands of times and correctly capturing asymmetric up/down skew, changing volatilities/correlations, path dependence, and mean reversion rather than assuming a normal distribution that severely misprices tail risk events.

Closing Thoughts: With the recent banking crisis showing what can happen when risk is not managed properly, companies will likely and should work to better understand their risks utilizing technologies like Mobius’ RiskNet. We look forward to following the company, as they continue to provide their unique risk management solutions to energy and industrial companies as well as their continued expansion into renewables markets and the management of emerging energy transition risks.

Company Spotlights

March 2023