Hilbert Investment Solutions has launched its first publicly available UK structured product, the UK Conditional Quarterly Autocall Issue 1.

The product is a 10-year soft-protected knockout structure linked to the performance of the FTSE 100 index paying a quarterly income of 1.75%, as long as the closing level of the underlying asset is at least equal to 80% of its opening level on any quarterly measurement date.

The product will mature early if the closing level of the index is at least equal to 110% of its strike on any quarterly observation date from the second year of the term (November 12, 2018). If this happens, investors should expect to receive the income payment for that final quarter, and full repayment of their original investment.

The choice of underlying will resonate with UK retail investors, "which is our target market for this issuance" and the 10-year term will help to maximise income payments, according to Steve Lamarque (pictured), Hilbert's founder. "Investors will benefit from the quarterly kickout feature, starting from November 2018, with a 110% barrier, particularly those seeking to boost their income in retirement," said Lamarque. "Despite the unusual 10-year term, our target market research has found that this is a strong compromise for maximising income payments for investors with a strong likelihood of the capital being paid before the end of the term."

The counterparty for the product is A+ (S&P) rated Citigroup Global Markets Funding Luxembourg SCA and the minimum investment amount is £5,000.00. The product, which is administrated by Hargreave Hale, has a rating of C, an exact risk score of 5.15 and volatility rating of 10.77, according to the UK Structured Products Association code. The product has a one-off distribution fee of up to 1.5% to cover its costs for marketing the plan.

This is the first time since 2009 that Citi has been featured in a public offered UK structured product, according to SRP data. Citi entity appears as the derivative manufacturer of 15 expired products sold by Citi, Premier Fund Managers and Keydata, in the UK market, and two sold by Citi to international investors.

Hilbert launched its first public offered income product, Rendement Patrimoine Avril 2016 in France, a 10-year knockout/reverse convertible linked to the CAC Large 60 Index, hedged by Natixis and sold €30m in France. The life insurance product matured early paying 108% return after one year.

Hilbert has sold five privately-placed structured products in the UK from its income series, a knockout range hedged by UBS and featuring a basket of indices comprising the Eurostoxx 50 and FTSE 100.

The new income product follows the company's launch of a portfolio management service based on structured products which is headed by David McFadyen, UK business development manager at Hilbert.

The company was established in 2012 by former Old Mutual head of structured products Lamarque to specialise in cross asset, structured solutions covering equities, rates and commodities. In 2016, Hilbert joined the UK Structured Products Association and aligned itself to the UKSPA Code, using its product risk rating. Earlier this year, Hilbert received approval by the UK Financial Conduct Authority (FCA) to offer structured products in the UK market.

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