Pioneer Investment Management plans to launch its first structured products linked to hedge funds and may use over-the-counter derivatives to structure them. The move follows a planned merger with Momentum Asset Management.
Eric Pinn, head of international business development and strategic planning in Paris, said the fund manager will use either a threshold method or call options to structure the guarantee, depending on which offers the best risk/reward ratio at the time. He said it is likely to issue between EUR50-100 million (USD49.4-98.8 million) a year.
These products were originally aimed at institutional investors, however, Pioneer will start offering these products to high-net-worth individuals and retail investors, said Pinn. There are only some jurisdictions, such as Hong Kong, which allow retail investors to buy these products, but Pinn expects others to allow retail investors to take part.
The fund manager has not chosen a firm to structure the products, but would likely choose a European bank, such as CDC IXIS Capital Markets, BNP Paribas and Dresdner Kleinwort Wasserstein. It will chose the firm based on its structuring ability.