Cube partners with UK discretionary fund manager to provide structured product managed portfolio service

P1 Investment Management has launched a structured product managed portfolio service in conjunction with independent structured product firm Cube Investing. The service has been designed to provide investors with an "efficient and effective" way to invest in structured products, using a portfolio approach as opposed to the traditional ad hoc selection of individual structured notes, according to David Stuff (pictured), chief executive at Cube Investing.

"The agreement with P1 Investment Management follows what we have been doing with James Brearley & Sons since last year," said Stuff. "P1 IM focuses mainly in managing money on platforms and they were very interested in using this approach. They will use our risk management tools and analytics to allow them to buy products that satisfy the defined investment and risk limits of each model portfolio."

The model portfolios are managed on a discretionary basis and will be provided at a price of 0.75% plus VAT for account values up to £1m, and 0.25% plus VAT thereafter. There is a mandate for each portfolio that defines the investment objective and risk profile. Each portfolio will also provide strategic asset allocation; product selection; portfolio construction; and ongoing monitoring, product changes & rebalancing. "Our added value is the analytics we provide to help asset managers with the product selection," said Stuff.

"Our focus is on the research and risk management proposition we offer," said Stuff. "As far as the structured products market is concerned, we think that an increasing number of advisers are moving away from selecting individual plans for individual investors and towards a model where they outsourced the investment selection for structured products, and this is an area where we can offer value."

Structured investments have offered investors good and steady returns in the past and "this will continue to be the case in the future", according to Stuff. "This needs to be publicised," said Stuff. "Structured products are like a hedge covered call strategy. They provide steady returns and can also be used to protect capital which what most investors want. Our specialist analysis helps P1 identify the products that have an attractive mix of risk and return."

The partnership with the UK adviser-led discretionary fund manager it is testimony of how the UK structured products retail market has evolved over the last few years, according to Stuff. "Many retail advisers, and wealth managers with advisory services now recommend structured products and we think that segment of the market remains pretty healthy," said Stuff.

The partnership as "a completely new approach to structured product investing", according to James Priday, managing director of P1 managing director. 'Advisers have been taking a more 'portfolio-based approach' for clients and outsourcing more to discretionary fund managers,' said Priday, in a statement. 'This option to use a diversified structured product portfolio should result in less risk for advisers and their clients.'

The new service will provide 'an efficient and effective way' to invest in structured products, explaining the products within the portfolios were institutional structured notes that can be traded daily and, as they do not carry plan manager charges, have lower costs, according to Priday. 'The demand for structured products has increased significantly over the past decade and this new proposition has already been well received by advisers and their clients,' said Priday.

The Cube-P1 partnership follows Investec Wealth & Investment's launch of a dedicated Structured Product Service for wealthier clients of financial advisers through which clients can choose from two pre-determined portfolio mandates to best reflect their personal circumstances, risk appetite and investment objectives.