Structured Investments provide investment solutions designed to optimise positive risk adjusted returns, regardless of the prevailing market conditions. As such, it looks to insulate investors from systemic market shocks, offering a safer way to get exposure to traditional asset allocations.
This approach is designed to be a complement to traditional long only equity and fixed income investing, at a time when both they have both become correlated as a result of zero per cent and negative interest rate policy, and Central Bank Quantitative Easing, which has artificially pushed these asset prices to potentially unsustainable levels.
Best of all, structured investments can be created at “a fraction of the cost” of a normal active fund. Prices generally range from 0.75% – 1.5% one off up-front fee for a typical 5 year structured investment note, rather than the burden of annual fees.
A SOLUTION – CLEAR RETURNS WITH BUILT IN PROTECTION
The structured investments team have a long background in convertible bonds and structured investing on both a discretionary and advisory basis. In their basic form, a structured investment is similar to a convertible bond – it’s a bond, which gives the investor effectively a “par put”, money back at maturity (subject to the solvency of the issuer) and also and embedded equity option. This means if the underlying share price of the bond-issuing company performs well, then you will participate in part of the upside rally of the shares. But if the shares of the issuing company fall by any amount, then you will receive all your money back at maturity irrespective of how far the shares drop, again subject to the solvency of the issuing company. Structured investments have similar asymmetric risk profiles – a level of downside protection, coupled to some participation in the upside.
“BEING YOUR OWN HEDGE FUND MANAGER”
At Shard Capital we adapt the convertible bond asymmetric risk profile in order to gain access to specific investment themes across most asset classes and expressed via structured investments. These can be of our own design as well as client driven demand. A predetermined level of capital protection will be built into an investment theme along with a pre-determined level of upside participation. The “Capital Protected” element is subject to the solvency of the financial institution issuing the structured investment. We price up investment themes expressed via structured investments in a beauty parade across several investment banks in order to ensure the most competitive pricing. This also includes daily liquidity for both bids & offers on typically a 1% bid/offer spread in normal market conditions.
A TEAM OF EXPERTS
At this stage of the investment cycle, structured investments will increasingly be seen as the safer alternative to long-only exposure in client portfolios. We have lines open with more than 10 financial institutions which give clients the ability to create structured investments reflecting their views and also provide a choice of issuing counterparty and pricing power.
We have an award winning track record and long history of using structured investments expressing different themes across most asset classes incorporated in an absolute return strategy. The team provide the “hand holding” from the idea creation stage, and the structuring, quantitative analysis, competitive pricing and secondary liquidity that investors should expect.
Interested? Contact us for more information or to set up a meeting.