Latest: Privatam rolls out ‘find your investment match’

Monaco- based wealthtech provider Privatam has rolled out a new customer initiative to ensure structured products ‘are adapted and understood by each investor’.

The firm’s ‘Find Your Investment Match’ is aimed at enhancing the customer experience and wants and brings ‘a significant touch-up’ to Privatam’s digital platform by further enhancing the investment process with a focus in providing a ‘positive user experience to make services more personalised and comprehensible’.

Customised investments are essential to every portfolio and there are no more excuses not to use them - Stanislas Perromat, Privatam

Going forward, wealth managers will be able to choose whether they want to create or select their investment match, according to Stanislas Perromat (pictured), co-founder of Privatam.

‘Investing in structured products has historically contained multiple pain points,’ he said. ‘Customised investments are essential to every portfolio and there are no more excuses not to use them.’

The platform currently handles over US$10 billion worth of investment products for over 800 wealth managers in 15 countries.

J.P. Morgan sues Tesla over warrants

J.P. Morgan Chase Bank, National Association, London Branch (J.P. Morgan) has filled a ‘breach of contract action’ against electric vehicle maker Tesla in relation to a tweet its CEO Elon Musk made about returning the company to private ownership.

The complaint to the Southern District of New York contends that Tesla Inc. ignored its obligation to pay J.P. Morgan for a series of warrant transactions which required Tesla to deliver either stock shares or cash, if when the warrants expired, the share price of the car manufacturer was above the contractual strike price.

According to the filing, Elon Musk tweeted ‘Am considering taking Tesla private at US$420. Funding secured’ on 7 August 2018 and the company reportedly made additional statements and took actions insisting on the going-private transaction. A Securities Exchange Commission action later revealed that funding was not secured and that Musk’s tweets were false and intended to mislead the market.

The filing notes that the announcement ‘caused immediate and significant economic effects as the market attempted to price in the likelihood of Tesla going private and making a tender offer at US$420 [per share]’.

According to J.P. Morgan, those economic effects significantly decreased the value of its warrants which forced the bank to reduce the warrant strike price on 15 August to ‘maintain the same fair market value as the warrants had before Tesla’s announcement’, required under the agreements.

However, Tesla abruptly changed tack on 24 August 2018 and announced it was foregoing the transaction, which reportedly increased the value of the warrants. J.P. Morgan then adjusted the strike price, a move that partly reversed the initial reduction. Tesla allegedly objected to the adjustments, arguing that they were unnecessary because it had so quickly abandoned its going-private plans.

When J.P. Morgan went to settle the warrants in the summer of 2021, Tesla reportedly renewed its objections to the adjustments, but the parties agreed that Tesla should at least settle an undisputed number of shares which allegedly left a deficit of 228,775 shares of Tesla common stock and J.P. Morgan with an open hedge position equal to that shortfall.

The pleading states one claim for relief, breach of contract. J.P. Morgan is seeking to recover over US$162m under contractual entitlement, plus interest, and an award of its attorneys’ fees and costs. Davis Polk & Wardwell represents J.P. Morgan in the case.

J.P. Morgan did not respond to requests for comment by press time.

Click in the link to read the court filling.

Lincoln adds investment options to index annuity

Lincoln Financial Group is launching a new crediting strategy within its flagship indexed variable annuity, Lincoln Level Advantage. 

Beginning 22 November, 2021, new contracts with Lincoln Level Advantage will offer a spread crediting strategy ‘providing investors with a new option for portfolio growth opportunities, balanced with added protection’, in addition to several existing investing options linked ot the To the S&P 500 index and Nasdaq Capital Strength Net Fee Index.

The Lincoln Level Advantage spread account provides an added option for clients who value protection, but also have a strong desire to maximise earning potential. If the index performance is positive, the account begins earning uncapped growth once the performance exceeds the spread. If the index performance is negative, the account is protected up to the amount of the protection level.

The spread indexed account option is currently available for new contracts with a six-year indexed account and a 15% protection level. Spread rates for new indexed segments will be declared five business days in advance of the beginning of a segment.

A spread rate is the percentage of the index’s return deducted from the indexed account when the index return is positive, which means a return could be lower than if invested directly in a fund based on the applicable index. There is risk of loss of principal if negative returns exceed the selected protection level, as well as a risk of future availability as the indexed accounts with applicable spread rates will vary over time.

Additionally, investment instructions must be received by the end of an indexed term or a new indexed segment will be selected on behalf of the policy holder. The available indexed account with applicable spread rates will vary over time.

Qatar exchange partners with MSCI to launch ESG tradable index

Qatar Stock Exchange (QSE) has launched the MSCI QSE 20 ESG Index (MQ 20 ESG Index) in collaboration with MSCI.

The joint index is designed to track the top 20 securities within the MSCI Qatar IMI Index that demonstrate the best environmental, social and governance (ESG) profile. 

The MQ 20 ESG Index is the first ESG index on the Qatar equity market and marks the first co-operation between QSE and MSCI in equity indices. The MSCI QSE 20 ESG Index methodology uses a ‘tilt’ approach to index weightings based on MSCI ESG Ratings (AAA through CCC) and MSCI ESG Rating Trend (i.e., is a company improving its rating).  A company’s weight is capped according to its weight in the MSCI Qatar IMI Index. 

QSE intends for this tradable index to serve as a basis for index linked financial products, particularly exchange traded funds.

‘We are responding to investor demand with the launch of this index,’ said Rashid Al Mansoori, CEO of Qatar Stock Exchange. ‘The market has been quite vocal – sustainable investing is now a critical part of the decision-making process. We expect the index to act as a barometer for local companies in terms of ESG performance.’

HSI deploys New China Economy Index via ETFs

Hang Seng Indexes (HIS) Company has licensed the Hang Seng China New Economy Index to Hang Seng Investment Management Limited to serve as the underlying index for the creation of an exchange-traded fund (ETF).

The Hang Seng China New Economy Index is a gauge with a focus on Chinese enterprises that reflects the performance of the top-tier Chinese companies listed in Hong Kong, mainland China or the US that operate in ‘New Economy’ industries.

The around 30 ‘New Economy’ subsectors are those that exhibit sustainable rapid revenue growth, with higher proportion of research and development expenditures, or are strategic new industries identified by Chinese government policies.

The new ETF will bring the number of exchange-traded products linked to indexes in the Hang Seng Family of Indexes to 103 – with listings on 14 different stock exchanges across the world. As of 31 October 2021, AUM in products passively tracking indexes in the Hang Seng Family of Indexes had reached a total of about US$45.7 billion.

The ETF was listed on the Hong Kong Stock Exchange on 11 November 2021 with assets under management (AUM) of HKD117m.