Exotic Asset Classes Take Over From Exotic Payoffs

Investors across Europe have bought capital-protected exposure to a range of asset classes this year and shunned complicated equity structures, such as cliquets and worst-ofs that offer exotic payoffs.

  • 23 Dec 2004
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Joachim Willnow
Investors across Europe have bought capital-protected exposure to a range of asset classes this year and shunned complicated equity structures, such as cliquets and worst-ofs that offer exotic payoffs. Officials say the trend is likely to continue as equity market performance remains unconvincing.

Several houses, including Deutsche Bank, JPMorgan (DW, 8/6) and Merrill Lynch (DW, 2/22), merged their debt and equity structuring desks this year partly prompted by the growth of cross-asset class structuring. "I think we will see more hybrid products," said Satish Ramakrishna, managing director of hybrids trading at Deutsche Bank in London. Ramakrishna said deals combining equities with currencies or rates have been popular and he expects this to continue. Joachim Willnow, head of equity derivatives at Nomura in London, said there has been little innovation in structured products since the first correlation baskets in 2000. "More and more people are asking for cross-asset solutions," he added.

High oil prices helped boost sales of commodity-linked products (DW, 10/15) and a retail commodity product launched by U.K. boutique Dawnay Day Quantum (DW, 10/1) proved the appeal of the asset class is not restricted to high-net-worth investors. "Crude oil backwardation makes options cheaper," explained Ramakrishna, who noted the yield curve anomaly in which spot prices are more expensive than future prices has made crude oil an ideal asset to boost equity structured products.

Investment products that offer capital-protected exposure to emerging markets, such as India and Eastern Europe, have also proved popular this year (DW, 3/28). Willnow said the appeal for emerging markets has so far been from sophisticated investors, such as private bank clients, but is likely to filter down to retail investors next year.

  • 23 Dec 2004

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 24 Jul 2017
1 Citi 253,106.92 930 8.89%
2 JPMorgan 230,914.50 1036 8.11%
3 Bank of America Merrill Lynch 221,389.46 762 7.78%
4 Goldman Sachs 171,499.26 554 6.03%
5 Barclays 169,046.60 646 5.94%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 25 Jul 2017
1 HSBC 27,039.93 106 7.36%
2 Deutsche Bank 25,125.19 81 6.84%
3 Bank of America Merrill Lynch 23,128.33 61 6.29%
4 BNP Paribas 19,315.94 110 5.26%
5 Credit Agricole CIB 18,706.93 106 5.09%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 13,488.13 59 8.47%
2 Citi 11,496.21 73 7.22%
3 UBS 11,302.86 45 7.09%
4 Morgan Stanley 10,864.95 59 6.82%
5 Goldman Sachs 10,434.21 54 6.55%