Hilbert Investment Solutions, the Anglo French structured product boutique offering its 'Defensive Income Portfolio' as part of its discretionary management service, has paid retail clients their first income payment of 2%, and added two new structured investments to the portfolio.

'We put a lot of time into the research and development of this service and I have no doubt that it will continue to expand over time,' said Hilbert founder Steve Lamarque (pictured), adding that the portfolio targets investors willing to benefit from variable exposure to equity markets and, if required, to monetary markets due to its dynamic asset allocation approach, while enabling investors to benefit from capital protection based on rolling maturities.

Hilbert's portfolio uses a two-fold payoff performance driver via phoenix and autocall products. At any time, funds in the portfolio are at least 95% invested in structured products (the remaining 5% may be invested in money market products if required). The portfolio targets an annual income of 8% and offers a 40% downside protection barrier on the underlying basket of indices for each five-year rolling maturity.

The portfolio is administrated by James Brearley & Sons, the same financial advisor managing Cube Investing's 'Managed Portfolio Service' which was made available via online wrap platform Platform One last week. James Brearley & Sons uses Cube's Investment Products Research's (IPS) analytics to help with the product selection.

"This is clearly part of a trend towards professionally-managed structured products in open ended format," said Simon Harris, director of digital distribution at Cube. "Our buy-side analysis is ideal for managers looking to capture the opportunities this trend is providing, including detailed Mifid-level reporting."

Hilbert's Defensive Income Portfolio which was comprised of five UBS products (XS1459611494, XS1496352623, XS1514188132, XS1589619540 and XS1589510889) now contains seven holdings following the addition of two new structured investments issued by Goldman Sachs International (XS1603308302) and Citigroup Global Markets Funding Luxembourg (Income Series: UK Conditional Quarterly Autocall Issue 1/XS1637177277). The portfolio service is available in the UK through direct investment, ISA or SIPP.

The portfolio now offers exposure to products linked to the FTSE 100, Eurostoxx 50, and S&P 500 indices with 88% to the Eurostoxx 50/FTSE 100 indices, and 12% to the S&P500/FTSE100 indices. In terms of counterparty risk allocation, 75% of the portfolio is exposed UBS, and 13% apiece to Goldman and Citi. In addition, 71% of the portfolio is linked to Phoenix structures with the remaining 29% linked to pure autocalls.

The managed portfolio is designed to be held for a five-year rolling period although investors can sell their investment at the current market value. The portfolio will be evaluated daily with Hilbert charging a management fee of up to 1% per annum to cover the investment management and administration associated with the managed portfolio. The minimum credit rating required by the portfolio is BBB- and the minimum investment amount in the UK is £10,000.

Hilbert believes that delivery is just as important as structuring, 'with ongoing client support including high quality research which enables distributers to explain the rationale behind the tools and ideas and how they fit within investment portfolios'.

A Hilbert spokesperson said the current focus is on establishing the firm's Defensive Income Portfolio and that the firm has "no plans to expand the portfolio service to other types" including balanced/neutral and bullish offering.

The firm 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 boutique has also marketed a number of private placements in France and has marketed an income knockout structure linked to the Cac 40 index in the French market.

Hilbert launched its first publicly available UK structured product, the UK Conditional Quarterly Autocall Issue 1, hedged by Citi, in early October, which complements 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.

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