Securitisation platform provider Gentwo has become the underlying asset of a new tracker certificate launched by Swiss asset manager Clarus Capital. The new tracker has been issued using the securitisation platform Gentwo set up for the asset manager at the end of 2018.

Clarus is seeking to leverage its capacity to independently issue next-generation financial products without the involvement of a bank issuer to target its institutional clientele with new securitised bankable assets and the possibility of making early-stage startup investment in this Swiss securitisation specialist.

“[Gentwo] has even exceeded its growth expectations,” said Roger Ganz (pictured), head asset management at Clarus Capital. In our view, an investment like [this] can be an interesting addition to a diversified portfolio.”

Gentwo recently raised CHF10m after a classic round of financing with the securitisation specialist  being advised by PwC, which will “serve the company’s next phase of acceleration, in particular its internationalization, further expansion of its business activities, and new growth initiatives,” according to Patrick Loepfe, chairman and founder of Gentwo.

“By making ourselves an investable and ‘portfolio-compatible’ asset, we are making use of a very modern option for raising capital,” said Loepfe. “In the process, we are also able to make optimal use of our own core competence, securitisation – the very basis of our business success.”

Swiss discount certificates outperform stocks and SMI in Q2

More than two-thirds (69.73%) of Swiss discount certificates achieved a higher return in the second quarter of 2020 than direct investments in the underlying assets, according to TTMzero.

The firm compared the price development of discount certificates linked to the five most important Swiss underlyings - the domestic SMI index and the four Swiss blue chips Novartis, Roche, Nestlé and UBS, in the first and second quarters of 2020 with the performance of direct investments in the respective underlyings.

In the first quarter, the analysis was based on 873 discount certificates based on the Swiss underlyings mentioned above - in the second quarter 631 certificates were based on these values. The analysis found that the second quarter was significantly more positive than the first with a share of discount certificates with a positive return in the second quarter of 79.87% (significantly higher than in the first quarter (28.41%)). In comparison, direct investments in the underlyings showed a positive return in Q2 of 69.73% compared to Q1 of 28.75%.

While in the first quarter the average certificate yield was -26.48% pa, in the second quarter it was already + 15.90% pa. Meanwhile, the underlyings had an average annual return of -29.14% in the first and + 21.34% in the second quarters, which suggests the swings in the underlyings were somewhat stronger both in the positive and negative areas than in the certificates.

In both periods examined - Q1 and Q2 - the majority of discount certificates achieved a higher return than the underlying. This was the case for a good 50% of the certificates in the first quarter and a good 69% in the second quarter.

The proportion of discount certificates that achieved a positive return in the corresponding investigation period, despite the negative development of the underlying, was over five percent in the first quarter of the year and over 12% in the second quarter.

When comparing the implied volatility of the underlying assets the analysis found that the expected fluctuation of the underlying in the second quarter was higher at 24.88% than in the first quarter (16.38%).

Credit Suisse boosts automation set up in Brazil

Credit Suisse has bought a 35% stake in Brazilian digital brokerage firm Modalmais. The deal gives the Swiss bank access to Modalmais’ more than one million clients across Brazil and the ability to leverage its digital banking and investment platform.

Credit Suisse’s acquisition of the company will give it a greater stake in the world of Brazilian fintechs, putting the Swiss private bank in competition with the country’s digital heavyweights such as XP Investimentos and BTG Pactual.

In return, the brokerage’s clients will have access to a selection of Credit Suisse’s investment products such as structured notes, funds, debt transactions and share offerings.

Modalmais was founded in October 2015 as one Brazil’s first digital banks - it has more than US$1.9 billion in assets under custody across more than 400 funds from some 140 managers. The platform offers banking and salary accounts services, credit cards, foreign exchange, payments and leverage from financial assets held in custody.

Clearing houses collaborate on new post-trade connection for ETPs

Clearstream Banking and LCH have agreed to make LCH-cleared equities contracts eligible for settlement within Clearstream Banking.

All global depository receipts listed on London Stock Exchange’s International Order Book are expected to be available for settlement through Clearstream in Q3 2020.

This includes Asia Pacific global depository receipts as well as the full suite of internationally settled exchange-traded products (ETPs), such as exchange-traded funds (ETFs), exchange-traded notes (ETNs) and exchange-traded commodities (ETCs).

Clearstream noted that global depository receipts have been increasingly popular, with an average daily trading turnover of US$570m on London Stock Exchange’s International Order Book during Q1 2020.

ETPs have also been continuously in demand, as investors in these products benefit from high diversification and liquidity as well as low cost, according to Clearstream.

Hong Kong’s CLSA deploys portfolio of global unicorns

CLSA, the international platform of Citic Securities, has developed a new investment strategy offering HNW and UHNW investors access to a ‘diversified portfolio of global late-stage private companies operating in innovative and disruptive sectors, an asset class traditionally accessible to institutional investors only’.

The investment philosophy follows the firm’s proprietary top-down thematic equity research and is centered on four dominant global themes driving transformation and innovation: digital economy & experience, deep technology ecosystems, sustainability, and wellness & smart healthcare.

The strategy seeks to mitigate concentration risk, and will capture investment opportunities in the direct secondary market to build a diversified portfolio of late-stage companies with venture capital backing from leading institutional investors. It specifically targets best-of-breed companies with private valuations exceeding US$1 billion and meeting CLSA’s investment criteria across liquidity, pricing and other metrics.

CLSA will provide investors, through their private banks, exposure to a diverse set of unicorns via various formats, including private investment funds, managed accounts and actively managed certificates (AMCs), among other options.

The new investment strategy will be managed by CLSA’s Structured Investments business in partnership with Gateway Private Markets for specialist direct secondary brokerage and end-to-end execution.

According to SRP data, Citic Securities has 37 live products in the China market worth an estimated US$87m.