BlackBee Investments, the Irish investment firm with offices in Cork and Dublin, was first launched in May 2014. In November 2014 the company was authorised by the Central Bank of Ireland as a Mifid investment firm and since then has established itself as one of the main providers of structured products in the Irish market, firmly cementing its place between market stalwarts such as Bank of Ireland, BCP Asset Management, Investec, Merrion Solutions and Wealth Options. BlackBee's investment products are primarily distributed through regulated financial advisors and are also available on certain self-directed investment platforms across Ireland.
SRP spoke to Victor Danylyuk (pictured), investment analyst at BlackBee, who gave us the lowdown on the firm's set-up, the selection of counterparties, the success of its autocallable range, its favourite asset classes and the expectations for the year ahead.
BlackBee works with a number of counterparties in an effort to provide issuer and counterparty exposure diversification for investors, according to Danylyuk. "We provide key information such as credit ratings and Tier 1 capital ratios in our brochures and documentation," he says. The firm has established relationships with a number of 'structured products' issuers which, according to Danylyuk "provides access to a large number of strongly rated and capitalised European banking institutions". "Given the strong link to counterparty credit strength in most structured products, [BlackBee] will continue to assess and develop its counterparty panel as the needs and demands of our investor base evolves."
Over the last 18 months, average annualised returns from the BlackBee Alpha product range, which either matured or autocalled, stood at 11.8%. "The Alpha range of products are developed through a rigorous investment process where we assess the 'top-down' macroeconomic environment and identify asset classes or sectors which we believe can add value over the investment horizon," says Danylyuk. Within identified sectors or asset classes, BlackBee then takes a bottom-up approach to identify the specific stocks or investments which the company believes are the ones most likely to perform, according to Danylyuk.
"The final step involves designing an investment structure which can add value for investors in a variety of market conditions, i.e. rising, flat or falling," says Danylyuk. "A key example of this is our Twin-Win structure which can deliver positive returns for investors even when the underlying stocks are falling."
When it comes to pay-off structures BlackBee uses a number of different investment products and approaches to meet its clients' needs. "These can be credit based, alpha or beta based, or even through alternative offerings such as senior secured lending on property exposures," says Danylyuk. "We understand that investors have a number of goals, and diversification of product offerings is one way we try and meet the needs of our growing investor base." The Irish structured products market is currently going through a period of change and products with a number of different payoff profiles are emerging, according to Danylyuk "Our aim is to continue to develop our product offerings and to create solutions that deliver consistent investment returns to our clients."
Although structured products in Ireland are often wrapped as pensions, BlackBee's products are generally offered in a note or certificate format. "Pension investors are just one type of investor which invest in our products," says Danylyuk. "In addition, our products are available on a number of pension platforms which gives pension investors a real alternative to binary type outcomes which can be experienced through fund based investing."
BlackBee's portfolio builder approach delivers a tangible choice of asset classes for investors, enabling them to construct portfolios with real diversification across a number of factors, according to Danylyuk. "Case in point, our equity-based Twin-Win products have resonated with investors and our beta range of index investments have also proved successful," he says. "We had our first maturity from our beta based index Twin-Win in recent months. Certain investors prefer the index based approach due to the diversification inherent in the underlying indices," says Danylyuk.
"Given the performance in equity indices at the start of 2017, we believe the ability to protect against declining markets will be a key feature of an investor's ability to protect capital and even generate positive returns in 2017. This has proved especially true in recent weeks with indices in the UK and US reaching record highs."
"We will continue to develop and expand our product range in 2017," says Danylyuk. "A key focus for the year will be to increase our range and breadth of products in the Beta and Alternative portions of our portfolio builder suite of products." Danylyuk expects 2017 to be an interesting year with the changing political landscape and the potential for continued interest rate increases in the US.
"Our flexibility and drive for innovation allow us to react quickly to changing environments and design and develop solutions which are relevant, technology driven and able to deliver consistent investment returns to our clients," says Danylyuk.
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