SRP in brief: arrow up at year-end

Arrow, a start-up founded by two former Morgan Stanley executives, is expanding into separately managed accounts (SMAs) in the US.

The new business line, to be operated under Arrow Investment Management LLC, is set to be launched by the end of the year serving as a third-party provider of structured products SMAs for registered investment advisors (RIAs) in the US.

In the US, UBS is on pace to record an annualised growth of over 50% with projected gross sales of US$12.5 billion to US$13.0 billion as of the year-end.

The Swiss bank has brought the largest commodity trade in the US structured note market in two years, on the back of a rising demand for commodities and its completed integration with Credit Suisse.

We also look at some of the best-selling products in the US and Mexican markets in 2024 based on SRP data as the Cash-Settled Equity-Linked Notes - Microsoft (06744EDH7) on the paper of Barclays took the crown with US$794.1m notional.

In Europe, Alternative investments provider Blue Polar Investment Solutions has entered the Swiss market following it partnership with Luma Financial Technologies. The Geneva-based company will be spearheaded by a team of four family office specialists.

Meanwhile, Swiss structured product provider Leonteq has named Eric le Brusq as head of investment solution based in Paris. Alessandro Ricci, head of investment solutions at the firm states that ‘the continuous strengthening of the regional franchise at Leonteq is a key pillar of our business strategy’ in a memo.

In the UK, Schroders has unveiled some of the equity derivatives (EQD) strategies adding value to investors in the current market environment in its latest research, including call spread collar, risk reversal and condor.

On the digital assets side, Societe Generale-FORGE (SG-FORGE) has partnered with Keyrock, a market maker, to strengthen the liquidity for its CoinVertible EURCV. It aims to facilitate ‘smoother transactions, increased liquidity depth, and consistent pricing, ultimately making CoinVertible EURCV a more attractive choice for users and institutional participants across a wide range of trading platforms’.

As a follow-up of our inaugural Derivia Intelligence Middle East awards, Van Der Rhoer at Bloomberg said he’s seen opportunity with significant scope for growth in structured product volumes in the Middle Eastern markets, particularly in the United Arab Emirates (UAE).

The growth was also observed by Stephane Mattatia, lobal head of thematic indexes and derivatives licensing at MSCI. In 2024, the index provider partnered with HSBC to develop and sell certain indexes in the region, including the MSCI Islamic ESG index and the MSCI thematic rotation indexes.

In our year-end roundup for Apac, foreign exchange (FX)-linked deposits continue to rule in China and autocalls remain top seller across the region, according to our Best-sellers Apac 2024.

In Japan’s publicly-distributed structured note market, ノックイン債/KI Nikkei 225, S&P500 M20290417, was the best-selling product year-to-date with a sales volume of JPY3.8 billion (US$24.7m).

The tech and chip business boom this year has prompted shares of Tencent and Nvidia to be the top two most-used underlyings for Hong Kong’s equity-linked investment (ELI) issuance this year, our Top underlyings Apac 2024 shows.

The XAU/USD pair continues to rule while HSBC deploys new Nasdaq risk control play, according to the China Market Review, November 2024.