Switzerland-based asset management consulting company Synpulse is planning to roll out a data aggregation service to support the largest investment banks in their actively managed certificates (AMCs) business.
The service is still undergoing testing, but has garnered significant interest from both investment banks and asset managers looking to place their strategies, according to Frank Troise (pictured), senior advisor with Synpulse.
"Asset managers see AMCs as a quick 'go-to-market' vehicle as they build to a UCIT offering," said Troise. "The Americans call them: turn-key mutual funds. Essentially, our tool sits behind the scenes, providing the live portfolio data of the asset managers to the investment banks."
Synpulse is building a database, a library of strategies that will keep feeding the respective platforms of the partner investment banks the data they need to structure certificates, according to Troise. "We see this as a phenomenal opportunity for the investment banks to do a significant amount of business in AMCs with large institutional counterparts," said Troise. "What is very significant is that the participating investment banks will have access to non-Ucits strategies managed by top tier large global asset managers. This means very exclusive plays (i.e. Asia Technology), managed by top global money managers with proven auditable track records."
Significantly for the asset managers, Synpulse's library will provide an accessible one-stop solution where they can submit strategies in a secure platform, according to Troise. "The strategies are the IP of the asset managers," said Troise, highlighting that the security protocols are the key strength of Synpulse's solution. "The strategies have to be distributed between counterparts in a very secure environment."
According to Troise, Synpulse is very much focused on Singapore and Hong Kong, where the firm has deals with 10 of the top 15 global asset managers, as well as with the seven top global investment banks. However, it is expected that the solution will take 'very very quickly' to the rest of Asia, especially Japan, said Troise, adding that the firm will also be in a position to take the platform immediately to Europe as well, where a retail version is 'not inconceivable'.
Troise noted that it is expected more partners will begin publicly announcing AMC activity soon. "Key for the asset managers has been the IBs credit rating, balance sheet, manufacturing, and distribution capabilities."
The biggest challenge for Synpulse right now is 'too much demand', according to Troise. "As the saying goes, we want to measure twice and cut once," he said. "There's a lot of pressure on us to launch the service, but we and our partners want to do it right the first time. In a way, the money managers we speak to are not at all interested in a $10m one-off trade ticket; they want to build large, scalable asset gathering businesses."
With regard to the broader structured products landscape in the Apac region, Troise noted that he saw a step up in structured products activity across the board in Q1, but things are slowing down in the second quarter, as 'Trump trade' appears to have hit a slump. "People are not seeing everything they wanted in Trump," he said, noting that business is still 'reasonably robust'.
Globally, structured products sales have been well on the decline in the year-to-date, with the notable exception of the Americas, where sales are up 12% on an annual basis, according to the SRP database. In the Emea and Apac regions, however, volumes are down 54% and 43%, respectively.
"There's still a lot of activity in fund-linked notes, as well as anything related to emerging markets," Troise said. "However, things could start slowing down significantly into Q3 and Q4, depending on how the Trump rally goes."
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