Some interesting and rare news from the M&A world, while in Apac, a group of ELI issuers leverage the troubled Evergrande share in their offerings.
iCapital, which delivers access to alternative investing to asset and wealth managers, has announced plans to acquire third-party distributor for structured notes Axio Financial.
The firm is seeking to expand its suite of investment strategies and bolster its distribution capabilities to support fund managers and build on the platform’s educational efforts, technology offering, and support system for financial advisers. The transaction is expected close during the final quarter of 2021. Axio’s chief executive officer Marc Paley is expected to take the role of managing director and head of distribution, reporting to iCapital chairman and chief executive officer Lawrence Calcano.
Turning our attention to Asia: as Evergrande Group’s declined earnings and bond default shadows the Chinese real estate and Hong Kong stocks, the Hong Kong equity-linked investment (ELI) market has seen an increased issuance tracking the stock led by HSBC.
Since the Chinese conglomerate’s Hong Kong shares began to steadily slide from April after reaching a 52-week high of HK$17.26 (US2.2m) in mid-January, a group of ELI issuers including HSBC, Bank of China (Hong Kong) and Bank of East Asia have increased the use of the Evergrande share in their offerings in Hong Kong SAR as single share or within a basket of shares.
China Evergrande stocks are commonly used in ELIs and fixed coupon notes, but the impact of the company’s ongoing debt crisis is ‘quite limited’ for the structured product market, a source at an investment bank’s exotic trading desk told SRP.
“The shares have been falling for months, which allowed investors to unwind the positions earlier,” the source said, adding that the bank’s structured product distribution clients may be advised to buy more volatility option of the shares.
Over in South Korea, a very active structured product market, since the debut of equity-linked securities (ELS) tracking ESG indices in April, the local market has gone quiet on ESG.
The issuance amount of KRW11.8 billion (US$10m) was generated by a total of five local securities houses through 56 products with a typical tenor of three years, SRP data shows. No new issuance of ESG-linked ELS has been recorded in the Korean market since early August, SRP data shows. The pause is unexpected as Shinhan Investment and KB Securities had planned to bring such instruments on a weekly basis to get investors familiar with the new underlyings.
Some literally positive news from France. Hedios’ H Performance 31 has redeemed early, returning the nominal invested plus a coupon of 44%. The 12-year life insurance, which collected €8.8m during its subscription period, knocked out at the first time of asking after the underlying Euronext Eurozone 40 EW Decrement 5% Index increased by more than 10% on 3 August 2021. It was part of Hedios’ Gammes H offering and issued on the paper of Société Générale.
Ranjani Ramachandra, a former managing director at Barclays Group in New York, has joined Wells Fargo Securities as managing director, head of equity-linked products trading.
Ramachandra joins Wells Fargo only nine months after being promoted to managing director, equity derivatives trading, in December 2020. She will continue to be based in New York and will report to Mark Kohn, managing director, co-head of derivatives trading & head of balance sheet and capital management.
Stacy Selig has joined US$53 billion hedge fund Millennium Management as deputy chief operating officer. Based in New York, she will work directly with Millenium’s chief operating officer, Ajay Nagpal to advance key global strategic business activities and initiatives across the company.
Prior to joining Millennium in 2021, Selig was a partner at Goldman Sachs, where she served as the co-head of global structuring for the global markets division. Selig was appointed to this role in early 2019 after Goldman reshuffled its systematic trading strategies team. Since then she was responsible for the bank’s strategies (strats) unit globally across equities and FICC alongside Thalia Chryssikou, co-head of global sales strats and structuring across fixed income currencies and commodities (FICC).