Structured Products

Structured products are created by combining two or more financial instruments, one of which is generally a derivative, to create a single ‘packaged’ product. Structured products provide the investor with access to an extremely wide range of asset classes with a pre-defined return profile. Products can be tailored for exposure to a variety of asset classes (e.g. equity, commodity, property, currency and inflation) with terms to suit the individual investor’s requirements. Furthermore, the investment horizon, investment currency, income or growth demands, credit quality and capital security needs are all factored into each design. The typical structured product investor will look to incorporate an element of capital security into a product with returns linked to one or more underlying price index or rate.

Our Role

We act as agent in the structured product market, a position that allows us to stand on the side of our clients looking to obtain the best terms possible from the market. We provide an independent service, granting our clients access to a wide range of issuers with credit ratings ranging from AAA to A. Prior to and during the dealing process, we provide advice on the terms, risk levels and all other components of the structure. Following dealing, we provide an ongoing service in terms of pricing, advice and market updates to our clients. These services are provided with a modest upfront fee structure - no ongoing fees are charged by us or the issuer of the product. We also provide a competitive daily secondary market service which allows trading on any business day in normal market conditions.

Tradability

The minimum issue size for most bespoke structures is £1,000,000 with minimum individual subscriptions of £50,000. All of the structures that we bring to market are tradable in small size in a competitive and liquid secondary market. The structures can be traded in whole or part on any business day. The bid/offer spread in normal market conditions is typically 1% - 1.5% with a settlement period of T+3 business days. This tradability permits investors to roll gains into new structures, thereby locking in previous gains and exposing a higher nominal to the underlying market of their choice. An example of one investor’s experience of rolling gains is shown graphically.