Dutch structured products expat IFA platform services clients deemed too small by major banks
Interpersona, the multi-issuer service platform that specialises in the design and distribution of structured solutions to the investment management industry, came to life in 2011 when Wim Roosens (pictured), a Belgian national, moved to the Netherlands. Initially he worked as a consultant for a Belgian company for which he focused on the Dutch market for structured products. In 2012, once the company was up and running, Interpersona shifted its focus to the international market working directly with banks and third party distributors.
Based in Almelo, 100 miles east of Amsterdam, the company has two permanent employees and collaborates with a number of consultants, according to managing director Roosens. "I mainly deal with sales and we have a full time administrator," he says. "We also work with a number of third party distributors who have their own network of clients. For example, we have someone in Asia with his own network, we have someone in Dubai. That's cost effective. No cure no pay. That works."
Interpersona offers investment solutions with the focus on structured products, according to Roosens. "The market is changing, especially at an international level," says Roosens, adding that Interpersona's clients are the classic expat independent financial advisers (IFA's), the majority of which are based in southern Europe, although the company has also customers in the Middle East.
"We see ourselves as an extension of the banks," says Roosens. "I speak a lot with the guys at the banks who are responsible for structured products in the Netherlands. They don't want to work with clients who have €50,000 to invest. They want one customer who has €500,000 or even €1m to invest," he says. "We service clients who as individuals are no longer of interest to the major banks but can still create volumes as a group. That's where we can be of added value."
There are a number of parties in the Netherlands who issue structured products on a regular basis but very few are public offers, according to Roosens. "In Belgium it's different. There we see a lot of public offers but they are distributed via the banks," he says.
When Interpersona first started out, the firm used to launch the same type of structured products over and over again, but that has changed due to the increasing demand for tailor-made products, according to Roosens. "Banks have reduced the minimum investment," says Roosens. "In the past [minimum investment] sometimes used to be €1m. Nowadays €500,000 or even €250,000 is enough. That makes it easier to deliver bespoke products which is also a lot more interesting for our clients.
"It depends how much money you have available to build a tailor-made product but often it starts with an investor who has, say between €250,000 and €300,000, and in most cases that is enough for the firm to create a product because the risk of the hedge is covered," says Roosens.
"After that we forward the product to other clients, to see if they are interested too," says Roosens. Interpersona mainly creates capital protected products and income products, such as phoenix notes, for its clients, according to Roosens. "The bulk of our clients are pensioners for whom capital protection and extra income, in addition to their standard pension, is important," says Roosens. "They want protection but at the same time they want a little bit more than the 1% you get on a deposit."
Interpersona has worked with Commerzbank, Natixis, Notenstein and Leonteq for its structured products. "We have done a lot of business with Commerzbank, although at the moment [we're doing] less because they have limited their business through life-insurance contracts," says Roosens. "Leonteq is interesting because they can also offer Deutsche Bank and Van Lanschot via their multi-issuer platform. We are now also involved with Exane/BNP Paribas and sometimes we work with third parties via brokers."
Equities, and especially indices or large cap shares are the underlying assets preferred by investors, according to Roosens. "People want to invest in something they know," says Roosens. "Every now and then there are investors who want to do something with commodities but if you look at the oil price, or the price of gold, people are not always comfortable with that."
That is why the firm has done a significant number of FTSE 100 structures, and products linked to the "so called safe havens" such as Australia, Sweden, and Switzerland.
"The payoffs vary, from 90% capital protection upwards," says Roosens. "The majority are phoenix memory notes, products with a maturity of five years on four indices with a coupon barrier at for example 80 and with a memory coupon where the client gets a [possible] coupon of for example 4% every six months."
Interpersona does not maintain an active secondary market for its structured products although "we do make our clients aware if we think there are opportunities", according Roosens. "Each week our clients receive an overview of the secondary [market] prices which we have collected from the banks," he says. "When for example a product decreases by 15 to 20%, we say to our clients: 'this could be interesting to buy on the secondary market'. At first our customers were not very familiar [with the secondary market] but now we see more and more interest."
Recently the company launched its first undertakings for collective investment in transferable securities (Ucits) fund, Serenity, which has currency options in euro, sterling and US dollar and for which RBC is the custodian. The strategy can invest up to 55% in direct equities or equity funds while the remaining funds are invested in bonds and other Ucits compliant financial products.
"Structured products are still very important but just like many others we think diversification is very important and therefore we have set up the Serenity fund, to provide more options within our company for our clients, a one-stop shop idea," says Roosens.
The Serenity fund was created because in the Belgian market, and also internationally, the interest for structured products is declining a little bit, according to Roosens. "The structured products market has always been driven by commissions which led to a number of inferior products being distributed," he says. "Some of the products issued and sold to clients in the past have been pretty bad and high risk which has caused reputational damage for the industry."
According to Roosens, the launch of Serenity responds to the firm's plans to offer alternatives to structured products as well. The fund is managed by Fiducenter in Luxembourg while Interpersona looks after the distribution. "Belgium is a very interesting market for funds and we are now busy looking in which other markets we could offer added value with Serenity," says Roosens.
Because Interpersona only issues private placements and has no direct contact with the end-investor, the impact of the pending European legislation in terms of key investor documents (Kid) and packaged retail and insurance based investment products (Priips) will be limited, according to Roosens.
"We only provide the factsheets and term sheets as official documents," he says. "For us the impact is nihil. The impact on the intermediary will be much bigger and that of course could have an indirect effect on us too, if the IFA's are less prepared to offer structured products to their clients because of the increased regulation."
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