Marex Solutions, a division of Marex Spectron specialising in the manufacturing of customised OTC derivatives, has launched a structured investment product offering. Marex's new structured investment business will comprise a catalogue of structured notes backed by Marex Spectron or third-party corporates.
The firm is approaching the market in a different way and seeking to capitalise on its technology to draw resources "more efficiently" at a product design level, according to Nilesh Jethwa (pictured), Marex Solutions' chief executive officer.
"Technology enables different functions to be quicker and more efficient throughout the value chain," said Jethwa. "This will allow us to get better pricing for our products. We have partnered with a strong multinational counterparty (Marex Spectron) which will provide the wrapper of the product."
The goal is to deliver to the structured product market the same high-level of client service and transparency that is being provided to Marex Solutions' corporate hedging clients, according to Jethwa.
The first trade was transacted on February 23, with the launch of a one-year fully protected USD-denominated note offering investors 75% participation to the GAM Star Credit Opportunities Fund.
"[The product offers a] combination of a competitive funding level from a robust counterparty and tools which promote client education and transparency," said Jethwa. "We would like to first establish ourselves in classic products, but eventually I see us being able to raise liquidity for many of our corporate clients. We also see technology developing to make products more efficient for the end investor."
The new platform will provide clients access to a complete range of products including capital protected, participation, yield enhancement and leveraged products on several asset classes including commodities, equities, foreign exchange, credit and mutual funds, but with a different set up.
"Traditional investment banks have provided structured investment products for many years, so in order to stand out from the crowd, we need to be able provide clients with something that differentiates us," said Jethwa. "We are trying to improve what they can trade, how they can trade it and how we look after them throughout the investment journey."
The firm has no legacy infrastructure, has benefited of recent fintech innovations and partnered with a number of 'leading firms' in quantitative analytics, real-time derivatives calculation, life-cycle management and documentation automation to develop a 'highly efficient, flexible and low-cost offering, which provides high-levels of client service and transparency'.
"Leveraging cutting edge technology, we can offer customised products across all major assets classes and price discovery will be close to instantaneous," said Jethwa. "We can trade this through traditional wrappers (notes and actively managed certificates)."
The firm is close to trading its first structured note via the blockchain in a move to respond to new investing trends, according to Jethwa. "The next generation might be transacting from their digital wallet, not their private bank. Most importantly, helping clients understand their product throughout the life-cycle of the trade and how their exposures develop," said Jethwa. "Smart contracts could eventually replace the role of paying agents and we want to be at the forefront of that development.
Launched in 2017, Marex Solutions has traded with corporate clients across the globe, from small regional sugar producers in South America to large multinational consumers and processors in Europe. The firm has also designed and traded hedging solutions for clients in agriculture, energy and foreign exchange.
SRP data shows that the GAM Star Credit Opportunities Fund has been featured in 19 products marketed in South Korea (12) and Switzerland (seven), all of which are live products.
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