Societe Generale, Barclays and Credit Suisse have joined Premialab, a financial technology platform for risk premia strategies, which has expanded its offering with the opening of a new European headquarters in Paris.

The platform is allowing institutional investors to access the large universe of systematic trading strategies available in the market. Investment banks are designing an increasing number of smart beta & risk premia indices that can be accessed in various ways including derivatives (swaps, options, structured notes) ETFs, Funds as well as dedicated mandates from asset managers, according to Adrien Geliot (below), co-founder of Premialab, and a former structured products sales director at Societe Generale.

"The demand for quantitative strategies has increased significantly over the last few years creating a revolution in the asset management industry," said Geliot. "Institutional investors are looking for strategies that are less correlated with traditional asset classes. Some of these investors have been disappointed with hedge funds and are now looking for more liquidity, transparency and lower fees."

"We believe that our platform is answering the need from institutional investors for data, analytics and streamlined access to systematic strategies," said Geliot. "Through PremiaLab, asset allocators can now access and analyse alternative risk premia and smart beta strategies from across a wide universe of providers to achieve more control over their investment risk whilst gaining significant cost benefits.”

Nikko Asset Management has recently launched a Ucits fund offering access to these risk premia strategies.

Systematic strategies are now "widely used amongst asset allocators and asset managers", according to Foued Jaziri (below), global head of SG Index platform at Societe Generale.

"There is a significant demand for new underlyings; either thematic (eg. ESG, megatrend) and/or smart beta indices in structured product. Clients are seeking underlyings with a greater upside potential together with improved pricing conditions," said Jaziri.

Digital platforms such as PremiaLab enables the bank to offer investors a "broader and facilitated access to our range of indices in this fast-growing market", according to Faziri. "The demand for systematic strategies will keep growing in 2018, as investors are looking for performance engine, transparency and cost-efficient underlyings," said Jaziri.

Institutional investors desire a diversified performance engine, and that the platform will help the bank to continue serving clients. "The universe of risk premia indices is getting larger and larger and clients are looking for an easy-to-use and independent tool to compare indices," said Nicolas Aractingi, director at Barclays.

Demand  for smart beta and thematic indices will only get stronger in 2018, "especially in France and Belgium," according to Aractingi. "We also see strong demand for systematic strategies from various clients in the US and Asia."

The platform will make the offering even more easily accessible to institutional investors, according to Walter Cegarra (right), global head of QIS structuring at Credit Suisse.

The Hong Kong-based fintech company launched its risk premia platform in 2016, and the expansion into Europe follows a successful track record in Asia. The platform has established a number of partnerships with several investment banks including Barclays, Credit Suisse, Société Générale Corporate & Investment Banking, as well as global asset managers active in this sector such as Nikko Asset Management.

Demand for systematic strategies has also increased as a result of institutional investors' disappointment with the performance of hedge funds. This has resulted in an increasing appetite for assets that provide uncorrelated exposure to the market but in a liquid and transparent way, and with lower fees, which is exactly what banks are doing with these risk premia, smart beta and quantitative indices, according to Geliot.

The platform is already providing information on an estimated US$250bn of assets under management (AUM) and is used by asset managers, insurance companies, pension  and sovereign wealth funds, and is seeking to reach 500 institutional investors by the end of this year, while also planning to launch in the US.

Structured products have included this strategy, including Deutsche Bank, which partnered with Arabesque to rollout new ESG and smart beta investment products range; UBS which licensed the QIX Deutschland smart beta index, as the basis for structured certificates in Germany, and Natixis, which licensed the Euro iStoxx 70 Equal Weight Decrement 5% Index to be used as the basis for structured products. Stoxx, one of the main provider of smart beta stragies for the structured products market reported that structured products linked to its iStoxx range has over US$1bn in assets.

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