Meteor Asset Management, a London-based investment firm launched last month, is marketing its first equity-linked investment. Dubbed the Prima Growth Plan, it offers U.K. investors exposure to the Nikkei 225 and the FTSE100 with a maximum maturity of six years. There is the potential for early knockout, however, if both indices are at or above initial levels at the end of the first year, returning the investor's capital plus 13%. The plan continues if the indices are below their starting level, but will pay 26% in year two, 39% in year three, 52% in year four, 65% in year five and 78% in year six if the indices return to or end above the start value. Capital is at risk if one or both of the indices lose 50% of their value and close below this level.
Graham Devile, managing director, said the knockout structure appeals to investors who think markets will be relatively stagnant. Referencing two indices instead of the typical FTSE 100 also created a higher potential payoff. Devile declined to name the counterparty on the deal but said it is a AA-rated investment bank. "We are trying to be a little bit different," he said, noting the group is also looking at offering capital-at-risk structures. Its most likely next launch, however, will be a three-year note with capital protection. "We're trying to look and see where no one else is," he added.
