Meteor Asset Management has launched the first retail structured product in the UK to be backed by Danske Bank, as the plan manager continues its commitment to offering investors a broad range of counterparties and country exposure.
The FTSE Quarterly Contingent Income Plan - November 2015 is an income plan offering quarterly coupons of 1.65%, provided the FTSE 100 index is at least equal to 75% of its initial level on that date. The product puts capital at risk and features a soft-protection barrier of 60%, while the counterparty risk resides with the Danish bank, which has a credit rating of A from Standard & Poor’s. “We have chosen to work with Danske Bank for a number of reasons, not least its strong credit rating,” said Graham Devile (pictured), managing director at Meteor. “Danske is the largest retail bank in Denmark and our collaboration with them offers advisers a broader range of counterparties to choose from, as well as country exposure,” said Devile.
Meteor enjoys the broadest selection of counterparties in UK retail, distributing products backed by the likes of BNP Paribas, Commerzbank, Credit Suisse, Goldman Sachs, Morgan Stanley and Royal Bank of Canada in 2015 alone, according to SRP data. Previous issuers of paper include Barclays, Bank of America-Merrill Lynch, BBVA, Lehman Brothers, Rabobank, Royal Bank of Scotland and Standard Chartered.
“We see part of our role in the market as being a one-stop shop that allows investors access to a broad range of counterparties and, thus, diversification of credit and country risk,” said Devile. “We’ve always worked with a broad range of counterparties, so this is nothing new for us – our range is now far more extensive than most of the other players in the market.”
The addition of Danske to the mix comes at a time when traditional market-leaders, such as Barclays and Morgan Stanley, are on an indefinite hiatus (although the return of the US bank is touted as “imminent” by several market players). The entry of Danske to the UK could be a further boon for investors by way of introducing new product ideas to the market. While the product origination typically comes from Meteor, the London-based firm often borrows ideas from the different counterparties it works with, according to Devile.
The Danish bank, which according to SRP’s database has issued 96 structured products since January, is a leading player in the Nordics, enjoying a major market share in Denmark, Sweden and Finland, as well as a private banking presence in Luxembourg. In 2011, the bank created a foothold in Northern Ireland, thanks to the distribution network of Northern Bank, which is now wholly owned by Danske.
In July, Danske had the best-selling product in the Nordics, the DB DAXK Sprinter 2018, which sold DKK505m (€68m). Meteor will be hoping that Danske’s brand and experience will attract UK investors to this and future products. “It doesn’t necessarily follow that sales are lower with new counterparties,” said Devile. “Clearly, however, when you start afresh with an unknown name, it can mean that there is a slow build as people become comfortable and aware of the brand.”
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