Goldman Sachs’ US sales volume heads south, while Vontobel plans to extend its coverage to France, Sweden, and Finland in 2024.
GS Finance, the issuer entity of Goldman Sachs (GS), closed the final quarter of 2023 with a strong recovery of its sales volume.
The US banking giant collected US$3.7 billion from 1,130 SEC-registered structured notes in Q4 23, up 13.5% year-on-year, or an increase of 26.4% compared with Q3 23.
The full-year sales volume, however, reached US$11.4 billion, 14.5% lower than in 2022. The bank managed to retain the third position in the US issuer league table for 2023 after J.P. Morgan (US$16.9 billion) and Citigroup (US$11.6 billion). GS’ sales of structured products plunged in the first quarter of 2023 to US$1.9 billion and was followed by a gradual rebound over the next two quarters.
Luma Financial Technologies, a US-headquartered multi-issuer structured products and annuities platform, has expanded its partnership with Yieldstreet, a private market investment platform, to bring the company’s offerings to its customer base.
In doing so, Luma is broadening registered investment advisors’ (RIAs) access to alternative investment products, spanning from the initial purchase of products to full lifecycle management, all in one place.
Also in the US, Eric Glicksman, managing director, head of structured solutions for Americas, global wealth management, has parted ways with UBS, SRP has learnt. Based in New York, Glicksman joined UBS global wealth management (GWM) from Citigroup in 2006 to help the Swiss bank set up the structured solutions business for the Americas.
In Italy, we have seen great growth in our actively managed certificates (AMCs), and we will further optimise and tailor our AMC offering for this market - Matthias Griebel, Vontobel
In Europe, Vontobel, the Swiss structured products provider, is planning to extend its coverage to France, Sweden and Finland in 2024.
The predicted global recession was avoided in 2023, while rates peaked with inflation coming down. In this scenario, the Phoenix Memory Express, in different variations, was the structured product that dominated the bank’s target markets, according to its recent webcast on Investment Outlook: Key Findings for 2024. European underlyings such as LVMH, Mercedes, Volkswagen, ASML, and Total made up Vontobel’s top five in most weeks throughout 2023, based on a weekly weighted average.
In combination with potential rate cuts and a focus on quality stocks, Matthias Griebel, a specialist in structured investment solutions at Vontobel, has a positive outlook on the use of structured products in 2024.
‘In Italy, we have seen great growth in our actively managed certificates (AMCs), and we will further optimise and tailor our AMC offering for this market. In France we will start to tap into the market with structured products held by French insurers, beyond private placements and discretionary,’ said Griebel, adding that in Sweden and Finland, two relatively new markets for Vontobel, ‘we will join forces with our public distribution and asset management to fuel our presence and brand’.
Andorra-based private bank Morabanc is building up its capabilities to offer crypto structured products aimed at its risk-averse clientele and playing the market dynamics to offer added value.
Additionally, the European Commission’s continues its review of the Sustainable Finance Disclosure Regulation (SFDR) and the implementation of its EU Retail Investment Strategy (RIS) which will introduce a limited inducement ban, pricing benchmarks, ‘best-interest’ tests and an unfeasible timeline.
According to Thomas Wulf, secretary general of the European Structured Investment Products Association (Eusipa), the European structured products industry’s position and that of the financial sector in general on the EU’s retail investment strategy (RIS) proposed last year is that it “has been adopted by some governments like the French government, as well as several leading MEP in terms of rejecting a number of ideas”.
Looking at Asia Pacific (Apac), Singapore’s listed structured product space saw mixed results in 2023 as investors cautiously navigated the market. Structured warrants’ turnover was down 13% YoY amounting to SG$3.33 billion in 2023, while the turnover of daily leverage certificates (DLCs) decreased by 11% YoY to SG$4.23 billion.
“Rather than initiating a bearish position, [many investors] tend to stay out when they think [these underlyings] are declining,” Russell Wang, head of securitised products, global markets division at SGX Group, told SRP. “But compared to 2022, overall, I do think investors have got better because they’ve learned to be more tactical when it comes to executing products with volatile Chinese stock-linked underlyings.”
A year after the Indonesia Stock Exchange (IDX) listed the first ever structured warrants, the Southeast Asia country’s nascent market is growing by leaps and bounds.
The Jakarta-based stock exchange listed 182 structured warrants in 2023, with the average daily trading value of structured warrants reaching IDR3.5 billion (US$1.75m), a 34.8% year-on-year (YoY), according to a spokesperson for the IDX’s business development division. The most widely used underlyings are concentrated on local banks and commodity stocks.
Image: Microgen/Adobe Stock.