The ESG thematic gained traction in this week’s headlines, as major banks and index providers doubled down on efforts to promote sustainability.
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After months of speculation as to the future of its asset management activities unit, Société Générale has announced a project to create a wealth and investment solutions team within its private bank to sell structured products and asset management solutions. The French bank will retain €16 billion worth of structured products of Lyxor’s AUM as the negotiation with Amundi to dispose of the bank’s asset management activities operated by Lyxor does not include these products, SRP has learned.
The agreement, which is subject to regulatory approval, will cover passive ETFs and active (including alternative) management activities for institutional clients in France and abroad with the exception of Lyxor AM Japan, as well as the sales and support functions dedicated to these activities.
The ESG thematic in Asia is seeing a lot of traction of late, as large banks compete to be at the forefront of innovation and inspiration in this sphere.
HSBC China has launched a structured deposit linked to the Solactive China Future Consumers ESG Screened PR Index to capitalise on China’s carbon neutrality initiative. The bank has exclusively licensed the index to wrap it as a two-year up-and-out fully protected product which struck on 5 March. Observed on a quarterly basis, the structured deposit has a participation rate of 130% and a trigger-out level of 120% while offering a trigger-out coupon of seven percent. The minimum investment is CNY50,000 (US$7,642.34).
SG, for its part, is pitching new outperformance warrants linked to the SGI European Green Deal Index after rolling out Delta-one certificates in Asia last December. It also plans to introduce an index tracking the SG China Green Tech Basket in the second quarter while arranging trades on the SG Green America Ahead Index, which went live on 2 February. The two indices tracking European and US equity are designed for institutional investors with Solactive acting as the calculating agent.
On the index side of things, Hang Seng Indexes Company has launched the Hang Seng Shanghai-Shenzhen-Hong Kong Clean Energy Index and Hang Seng Shanghai-Shenzhen-Hong Kong Autonomous and Electric Vehicles Index, to capture the growing interest among investors in renewable energy and electric vehicles. The Hang Seng Shanghai-Shenzhen-Hong Kong Clean Energy Index tracks the overall performance of the 30 largest Hong Kong and mainland China companies that are engaged in hydropower, biomass energy, solar energy, wind energy and geothermal energy generation and are eligible for trading through the Stock Connect Scheme.
Goldman Sachs has poached a senior private banker from UBS as it moves to target key families in the Middle East. Gabriel Aractingi has joined the US bank as head of private wealth management (PWM) for the Mena region.
Based in Geneva, Aractingi will lead Goldman’s PWM client coverage teams for the region, which are based in Geneva, London, and Dubai. The appointment is part of the bank’s PWM plans to expand its offering to high net worth individuals, family offices and foundations in the Mena region.
Technology and financial services platform DelphX Capital Markets is assembling a team of fixed income and structured product industry experts to spearhead the launch of its DelphX covered put options (CPOs) and covered reference notes (CRNs) facility. The US firm, listed in Canada, is an anonymous facility whose purpose is to be the middle entity. Through the firm’s special purpose vehicle, Quantem, along with its broker-dealer DelphX Services Corp, fixed income dealers can offer new Rule 144A securities (private placements) that transfer and diffuse credit risk, while enabling yield enhancement. This new concept would have an appeal to people who are either looking for entry into or currently in the structured product space and wanting alternatives, including “newcomers or folks who might have been disenfranchised by current structured products, perhaps from a negative past experience”.