Investec Structured Products, the British specialist business of the South African bank and asset manager, is targeting the Nordic region with a series of products offered to investors in Finland and Sweden.
Investec's first appearance was in Finland where local distributor Wallstreet Asset Management (now Korkia) offered its clients the Globaalit Brändit 2023 Osakesertifikaatti which raised €1m in March. The Finnish branch of Garantum followed suite shortly after with Autocall Suomi Takuukuponki nro 3451 which will be open for subscription until the end of August.
"Investec entered the Swedish market recently and now they are also stepping into Finland," said Garantum's CEO, Mikael Axelsson (pictured). "We hope to see them issuing in NOK and settling locally in Norway as well, soon. Our business is all about being able to provide the best terms while also assuring diversification in every respect, including counterparty risk. A broad range of issuers is necessary to achieve that goal."
The product, [Autocall Suomi Takuukuponki nro 3451] it is a short autocall (max three years) on two household names (Nokia and Fortum) with a guaranteed annual coupon of 8% and a risk barrier at 70%, according to Axelsson. "Quite an interesting bet to take," he said, adding that three-year products tend to attract more attention than longer-dated ones."
In Sweden, Investec Bank has so far offered five products using domestic providers SIP Nordic and Strukturinvest as distributors. SIP Nordic offered Autocall Svenska storbanker raising SEK6m (€0.58m) while Strukturinvest had great success with 1840 Marknadswarrant Svenska Banker cashing in SEK70m.
The 'market warrant' is a five-year growth product linked to the performance of an equally weighted basket comprising of Nordea, SEB, Handelsbanken and Swedbank. At maturity, if the basket performance is positive, the product offers 100% of the rise in the basket. Otherwise the product expires worthless. The final basket level is calculated as an average and the product is issued at 7% (SEK7 000). Strukturinvest with Investec as bond provider is currently offering a similar product 1853 Marknadswarrant Svenska Banker.
Strukturinvest's co-founder Fredrik Langley said this will not be the last time "we do business with Investec".
"We always try to spread the risk when it comes to issuers and use several different ones," said Langley. "If an issuer can offer what we need such as a flexible programme and being able to trade in Sweden and use IFAs, competitive pricing and service we're happy to use them. In this case we had a relationship established already with Andreas Regen since his time at Commerzbank so that played a role too."
Investec provides a range of financial products and services to a client base in three principal markets: the UK and Europe, South Africa, and Asia-Pacific. According to SRP data Investec is one of the top 50 bond providers having issued 86 structured products worth an estimated US$467m in 2018 to date. The vast majority of products were marketed in the UK (82), with the remaining products sold in Sweden (two), Finland and South Africa (one each).
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