After a year of low volatility, low rate environment and challenges around regulatory changes, Natixis has risen among the Italian distributors winning the 'Best Performance, Italy' award, which will be presented on the SRP's 15th Structured Products & Derivatives Conference on February 8 in London.

In the year to September 30, 2017, the French bank delivered some of the best annualised returns in Italy, and is seeking to build up on that success and establish itself as a solid issuer for the Italian investor and grow its business.

"We analyse market conditions and our clients' needs in detail, and then work to develop the best investment solutions to meet these needs in the current market," said Eric Le Brusq (pictured), global head of equity derivatives at Natixis. "Innovation should not mean unnecessary complication, and investors naturally prefer products they are familiar with. We, therefore, start with standard payoff structures and innovate by adding simple features to provide our clients with value."

In the past two years, the bank has unveiled new structures in the Italian market as the ongoing low rate environment makes capital guaranteed products less viable while investors are increasingly willing to take additional risk in return for higher yields.

"As a result, structures offering conditional capital protection remain popular, especially where the barrier is deep and observed on a specific date (European observation)," said Le Brusq. "Other common features include periodic coupons, shorter maturities and the Autocall feature, which gives investors a further possibility to get the product redeemed above par."

The capital guaranteed market has fallen by 17% over the past year, at the expense of the partially- and non-protected, which accounted for 80% the market at the end of 2017, up with 17% from the last year, according to SRP data.

One of the bank's best-performing products during the first three quarters of last year was its Autocall Star, which combines a knockout and reverse convertible payoff types with unconditional coupons, with early maturity triggered by the best performing stock in the basket, 'the star'. "[The] fixed coupons and enhanced capital protection naturally made it a popular choice among Italian investors," said Le Brusq.

The knockout, reverse convertible strategy has also been the most popular payoff in the Italian market in 2017, accounting for 29% of total volume sold in the market, according to SRP data.

Natixis' best-selling product in Italy was the Phoenix Domino Certificate, a product launched for the first time back in 2015. "In contrast to common Phoenix structures, which only pay periodic coupons if the barrier event is met by all underlyings, Phoenix Domino always pays out in proportion to the number of shares at or above the barrier level on the fixing date," said Le Brusq.

Natixis remain committed to the Italian equity derivatives market and is aiming at continuing to offer and market share. The bank has been active on the SedeX and the EuroTLX for few years now and plans to increase its exchange traded products offering for Italian investors.

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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