In the week that saw HSBC Private Banking’s Lavanya Chari become SRP Apac 2022’s personality of the year, we also saw an increase in M&A activity in the structured product space.

Asset and wealth management fintech iCapital will acquire Simon Markets, the US multi-issuer platform for an undisclosed amount. According to the announcement, Simon transacted more than US$48 billion in issuances of structured investments and annuity products in 2021 across 50 plus product manufacturers and 50 plus wealth managers through its platform – including IBDs, bank/regional broker-dealers and private banks, and it serves more than 100 registered investment advisors (RIAs), and more than 100,000 advisors.

Demand for complex financial products is increasing significantly, especially among mass affluent investors

The deal will significantly expand iCapital’s investment menu, and augment its technical capabilities, education offerings and support services for wealth managers the iCapital platform services more than US$125 billion in platform assets and employs more than 800 people globally. The firm acquired US third-party distributor for structured notes Axio and Bank of Singapore’s in-house private market feeder fund platform in the past year.

According to new research, investors across generations and wealth levels are seeking more specialised products in a bid to gain alpha. Demand for complex financial products is increasing significantly, especially among mass affluent investors. Just over one-quarter of them (26%) will invest in structured products over the next two years. This is one of the trends highlighted by ThoughtLab in new research which also found that mass affluent investors no longer rely exclusively on exchange-traded funds (ETFs) and mutual funds, and are starting to branch out and opt for alternatives such as structured products, and even art and other non-bankable assets, which were traditionally the domain of very high net worth investors.

CIMB Thai Bank has expanded its product range with the launch of the Maxi Flexi ESG structured notes which are targeted at Thai high net worth investors seeking to ‘increase their wealth regardless of market conditions under good governance practices’.

The new Maxi Flexi ESG structured notes offer 100% protection and provide a return on investment (ROI) at 0.25% to 0.75% annually depending on the investment format regardless of market conditions. The three-year notes are linked to the Citi FlexiBeta ESG USD VT5 index, a gauge focused on equities and government bonds related to ESG which automatically adjusts investment ratio and offer a potential 3-6% pa. The notes can be Thai Baht and US dollar denominated. 

HSBC Global Private Banking has launched online trading for structured products in Asia via mobile. Initially, the new feature will allow private banking clients with assets booked in Asia to trade fixed coupon notes (FCN) on their mobile phones, alongside cash equities, ETFs and foreign exchange which are already available on the bank’s trading platform.

The UK bank said that support for equity-linked notes will be added later in 2022 to ‘enable clients to structure their own investment ideas under our open architecture framework in real-time’.

HSBC clients using the trading app will be able to trade structured products on their mobile phones with coverage for underlying stocks across eight markets including USA, Hong Kong, Singapore, UK, France, Germany, Japan and Australia.

Multi-issuer structured products and annuities platform, Luma Financial Technologies, has appointed industry veteran Rafael Salvatierra as head of Americas. He has been a board member of Luma since 2019, has over 20 years of experience in originating, structuring, marketing, and executing transactions for institutional and ultra-high-net-worth clients based across the Americas and Europe ‘with product focus on solutions linked to all asset classes involving securitized and unfunded instruments with embedded optionality’.

In his previous role, he served as the head of product structuring, origination and ultra-high net-worth solutions at Bank of America Merrill Lynch. Before that, Salvatierra was Citigroup’s head of multi-asset structuring and cross-asset advisory within the global markets division and the private bank. Prior to joining Citi, he worked at the equity derivatives division of global markets at Merrill Lynch & Co.

US life and annuity provider Independent Life Insurance Company has launched iStructure, the first uncapped index-linked structured settlement annuity offering exposure to the Franklin BofA World Index. The new gauge powered by quantitative insights from Franklin Templeton and Bank of America aims at capturing long-term growth by systematically investing in a volatility-controlled equity index of companies around the world with the potential for high profitability.

The index combines a factor-based screen with a proprietary intraday risk management strategy and a US Treasury allocation to achieve consistent returns. Independent Life has secured almost US$50m in committed sales for the product from both settlement recoveries and instalment sales of real estate and businesses.