In the first of a two-part article, Richard Jory talks to Yann Garnier about his initiation into structured products, his arrival in Asia just as the market closed and the crucial change to cross asset.
Yann Garnier's ambition was installed in Paris over the 10 years he worked as part of Christophe Mianne's equity derivatives team, joining Societe Generale in 1998, when Mianne was the pioneering head of equity derivatives. "He wanted to build everything and he had a vision of the distribution of investment solutions to retail investors and wealth management; he also wanted to be the first and most innovative participant in equity derivatives, establishing the bank as 'the reference' to the industry," said Garnier.
Fresh from his legal and business studies, Garnier signed up as a sales assistant, taking calls and preparing marketing pitches. "They were looking for a profile that was not mainstream," said Garnier. "I didn't yet know what an equity derivative really was."
A year later, he moved to the new emerging markets desk as one of the young salespeople travelling Eastern Europe and Mediterranean rim to promote SG - then unknown in the Czech Republic, Hungary and Poland - as well as a new range of products, doing his first deal in Malta.
Nearly a decade later, Garnier swapped experience in Europe for the excitement of a vibrant Asia Pacific market. Buoyed by booming markets, he relocated to Hong Kong in December 2008, just as regulators in Singapore, Hong Kong and Taiwan decided to close their retail structured products market for a review that was estimated to take two months and ended up lasting as many years. "I arrived in Hong Kong to a welcome from 40 retail structured products salespeople and no business," said Garnier. "In early 2009, there were no deals, nothing, it was super quiet.
"That was my first experience of Asia, and I knew at the time that it was a matter of survival to diversify our business," said Garnier.
Due to the Lehman Brothers' Minibond scandal, retail markets would never return to their original form. "We were mostly an equity derivatives and a retail structured products house, and I was here to develop the institutional part; the best way to do that was to embrace the full spectrum of the product offering - fixed income and cross asset and create the cross-asset platform."
Becoming cross asset changed everything. "We were the pioneer in creating this cross-asset culture, which is an advantage in front of the client, because, instead of pushing products, you become product agnostic and listen and advise," said Garnier. First mover status helped the bank to attract fixed income and equities talent from across The Street.
"Within a few years, we managed to build a solid and integrated solution factory: we want to provide advisory to institutional clients and, when there are large volumes on any underlying, we want to offer the same consistently on flow and institutional products; and, over time, we've managed to build a leading market share on exotic equity, equity derivatives flow, exotic rates - where we were nowhere 10 years ago - and rates flow derivatives," said Garnier.
Being contrarian on Japan in 2009 also helped. While most banks were shying away, SG saw stable regulation and investors who were savvy and innovative when it comes to derivatives as a reason to localise staff, including an engineering team. "There are a lot of similarities between the French and Japanese in terms of technology and innovation," said Garnier. "We were also able to say that we were truly committed to Japan, which made a real difference in front of clients, and we were able to build our market share. We were there during the crisis, adding a JGB primary dealership in 2011, and Japanese investors have long memories... We developed a nice franchise in variable annuities, and our distribution business in Japan is now our largest in the region."
The Personality of the Year Award will be presented to Garnier at the SRP Asia Pacific 2018 Awards Dinner, which will take place on the evening of Wednesday 18 April at the Sofitel Singapore City Centre Hotel, Singapore. Garnier was chosen on the basis of receiving the highest number of votes from the 402 respondents to the SRP Asia-Pacific Awards Survey 2018.
The 5th SRP Asia-Pacific Wealth Management & Fintech Conference 2018 will take place on April 18 at the Sofitel Singapore City Centre Hotel in Singapore: the agenda and details of the conference are available at this link. For registration or information, please contact Helga Tirk at helga@structuredretailproducts.com
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