Cyrus Conseil is leveraging its track record to promote structured products as a fully-fledged asset class capable of boosting portfolio performance while minimising the risk of capital loss.

Structured products are now perceived as a standalone asset class, according to Pierre Kubis (pictured), head of structured products in the asset allocation division of the French independent private bank, wealth manager and family office firm. "Depending on the objectives and the risk profile of our clients, we can offer them an exposure which, in dynamic profiles, can reach up to 25% of total outstandings," said Kubis. The interest in structured products has been largely driven by investor willingness to accept volatility and risk in order to beat the low yield of traditional instruments, such as saving books and euro-denominated funds.

Previously a flagship for life insurance investment in France, capital guaranteed and, until recently liquid euro-denominated funds have been heading into a decline, according to Kubis.

"Our customers are aware of the changing environment, the more so as we have been alerting them to the impact that the low rates have on their portfolios", said Kubis. "The fact that they are mainly comprised of euro-denominated funds and unit-linked [multi-support] vehicles with a predominant bond ingredient, makes [portfolios] sensitive to a [possible] rise in interest rates that will [hypothetically] follow. As a result, many of our clients are now inclined to take more risk, and structured products constitute one of the instruments that we put forward, allowing them to benefit from the shift."

Cyrus Conseil's asset allocation team adds value to portfolios through bespoke solutions aligned with its clients' needs and risk profile, according to Kubis. "Although we mainly focus on equity shares to link our products to, we do not seek to offer solutions that would aim to outperform the equity market," said Kubis. "What we seek is to optimize the risk-return profile of the latter by implementing defensive solutions."

For its most sophisticated and/or constrained clients, the company implements dedicated solutions which enable them to benefit from bespoke products, according to Kubis. "This is the case, for example, for stable corporate treasury, for which risk-free investments are no longer attractive," said Kubis. "Their flexibility makes them the only asset class that is able to take advantage of the more violent and frequent peaks of volatility the financial markets have been experiencing in recent years, which makes their place relevant in asset allocation."

Although most categories of structured products are aimed at institutional clients, the positioning and size of Cyrus Conseil allows the company to offer all types of products to private investors. "The firm works hand in hand with various structuring teams, as well as the main issuers in the French market," said Kubis.

The company is selling Adama Mensuel Avril 2017 - Part A, a life-insurance wrapped structured note available for subscription until April 7, which is the new addition to Cyrus Conseil's Adama series. The 10-year play is linked to the Eurostoxx 50 and offers the possibility for early redemption every month after its first anniversary. The product was issued by Societe Generale and is listed on the Luxembourg Stock Exchange.

One hundred and twenty-five structured products were added to the SRP France database in the first quarter of 2017, an increase from the 100 products added in the previosu quarter.

New sales attributable to unit-linked life insurance wrapped vehicles amounted to €2.8bn in January 2017, accounting for 24% of total life insurance premiums for the month (€11.4bn), according to the Federation Francaise des Societes d'Assurances. This is a significant increase in the proportion of the 'unit-linked' ingredient of the contracts compared with the 20% of the total that the life insurance wrapper collected in the whole of 2016 (€134.7bn). An approximate 6.7% of this total are structured products, according to SRP data.

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