Garantum Fondkommission has dominated the structured products market in Sweden over the last few years. The firm steadily increased its share in the Sweden market, becoming, in 2017, the biggest distributor in that market, with a 29% share, taking top spot from Nordea, which has first place since 2012. The company is also active in Finland and Norway. "Garantum has consistently delivered excellent service and high quality products as measured by returns," said Mikael Axelsson (pictured), chief executive officer at Garantum. "Eventually that pays off. But I would much rather have a growing market, a decent number of vital competitors and 10% market share than what we are seeing today."

The distributor has a wide range of products in every payoff category, from autocallables and credit-linked notes (CLN) to partially capital protected products. Credit products were popular across the whole Nordic region last year and, in Sweden, made up 25% of sales. "This is the hunt for yield - plain and simple," said Axelsson. "We also saw large redemptions of very successful credit-linked products in 2017. That helped as well."

The distributor works with a large number of issuers, including Commerzbank, Credit Suisse, Goldman Sachs and Societe Generale, and local Nordic issuers, such as Danske Bank and SEB.

The structured products market in Sweden saw 25% less volume and 18% fewer products in 2017, compared to 2016, although is the only Nordic market that is showing a downward trend. "The negative development is driven by the big banks, which represent the largest distribution channel by far, exiting structured products," said Axelsson.

In 2017, impressive returns from Garantum products included its Autocall VD-byte Svenska bolag 2Max nr 2455 (220.46% / 46.85% pa) and Autocall Verkstad Max Kvartalsvis nr 2728 (146.18% / 43.33% pa), the two best-performing products in Sweden last year, according to SRP data. Of the 10 best-performing products in Sweden in 2017, nine were autocalls, returning between 24.95% and 46.85% pa. "We are very satisfied with the performance from the products that matured in 2017," said Axelsson. "We had 53 capital protected products mature at an average redemption value of 138 - that is an impressive risk-adjusted return. Out of 79 autocall redemptions, none resulted in a loss and the average annual return was just over 13%."

"This year, the new rules of the game will finally become clear," said Axelsson. "We have battled with Mifid 2 and Priips day and night - quite literally - for a long time now, and, sometime during this year, we should be able to shift focus to developing the business on more commercial grounds, rather than just regulatory," said Axelsson. "There is a lot of potential in combining modern technology and the flexibility of derivatives based investments. Maybe we'll see some of that being realised next year."

For this year's European awards, in which Garantum has been awarded both Best Distributor and Best Performance in Sweden, SRP has considered 342 tranche (subscription-based) products from the bank, consisting of 214 products with strike dates between October 1, 2016 and September 30, 2017, and 128 products that matured during the same period. The striking products were notes and certificates with a term between one and 8.5 years, with many different structures, like uncapped calls, credit defaults and autocalls, linked to a variety of different underlyings. The matured products were diverse with similar structures and underlyings.

SRP's 15th European Structured Products & Derivatives Conference 2018 will take place on 7-9 February at the etc.venues, County Hall, London.

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