Hilbert Investment Solutions is gearing up to offer discretionary portfolio, investment and retail plan management services in the UK following approval by the Financial Conduct Authority (FCA), which will allow it to offer structured product portfolios. "We have seen an increased amount of interest in the UK for structured product funds," said Hilbert founder Steve Lamarque (pictured). "[This] emphasises the start of a new era of expansion for Hilbert".
Structured products funds deliver the same kind of strategies as structured notes, but with the added flexibility of not being constrained by a marketing offering period, according to Lamarque. "This will be a complement to what we already offer, but with an open-ended set up, which will suit those investors that don't want to dependon tranche-based products, and this will allow us to increase our investor base and talk to more investors and advisers," said Lamarque.
Hilbert has sold five privately-placed structured products in the UK from its income series, a knockout range hedged by UBS and featuring a basket of indices comprising the Eurostoxx 50 and the FTSE 100.
"We have seen the popularity of structured products backed by multiple counterparties and this development is aimed at providing an alternative to those in an open-ended way," said Dasale Mallawa-Arachi, business development manager at Hilbert in the UK.
The fund wrapper will also provide a "very appealing proposition for UK investors, because they are not very common in this market and will provide a way to diversify portfolios and exposures", according to Mallawa-Arachi. "We will offer underlying and payoffs that are easily recognised by investors, and expand our offering if we see appetite for more complex structures and underlyings," he said.
Hilbert's move to offer structured products funds comes on the back of news of Mattioli Woods' structured products fund launch in December, which attracted £75m of investment. The Leicester-based boutique wealth management specialist has seen 'huge demand' for its structured products fund, which, on average, has been attracting more than £4.5m a week. The company predicts its unique venture with Commerzbank will deliver substantial cost-savings and better returns for clients.
The fund targets an average annual return of cash (three-month UK sterling Libor) plus 6% over a rolling three-year period, with a volatility below the leading benchmark equity indices. The structured products that make up the sub fund will gain exposure via derivatives and/or combination of derivatives to build the profile of the structured product, and the underlying reference assets which will determine the payout of the structured product via worst of or best of options.
The firm's chief executive officer Ian Mattioli said the fund sits 'as a constituent part of my own family's investment planning'.
According to SRP data, Mattioli has marketed over 50 structured products among UK retail investors of which 37 products are still live.
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