Boutique for independent asset managers targets investors in Mauritius with help of local introducers but investment banks should do more before the market can really start to flourish
Interpersona, the multi-issuer services platform based in the Netherlands, which provides independent financial advisers (IFA’s) worldwide with structured products, is increasingly focusing on a number of markets in Africa.
“Our interest for the African market stems from the fact that a number of expat IFAs became increasingly active in the market, especially in South Africa and Mauritius,” said Wim Roosens (pictured), managing director, Interpersona.
At the moment the company mainly focuses on Mauritius, where, through a number of strong connections, local introducers, with whom it cooperates, it could get an intro, according to Roosens. “They know the market well and can introduce us to the domestic market, as well as the Belgian and French asset managers based in Mauritius,” said Roosens. “Some of the larger players are developing fast like for example in Zimbabwe and Botswana and of course we want to cooperate with them.
“We are also investigating how the South African market develops, but outside the expat IFA’s, the offshore IFAs, we have little intros, that is something we want to develop in 2019.”
Interpersona services clients who as individuals are no longer of interest to the major banks but can still create volumes as a group, and that is where it can be of added value, due to its ability to “offer products in smaller denominations”, according to Roosens.
“We see that more and more IFAs are hiring ‘experts’,” said Roosens, adding that IFA’s use external asset managers for their discretionary management, but also use the “know-how” of specialists for their structured products.
“In Mauritius there is also an investment platform we have a very good working relationship with and in this way we develop. We are looking to get a license in Mauritius, for regulatory purposes, but at the moment that has no added value because almost no bank wants to deal with Mauritius, and that is a bit of problem at the moment.”
There are very few banks that want to close deals in South Africa or Mauritius. According to Roosens, there are only two or three. “I think this is because the banks do not have a desk because the market was not big enough, and also, in terms of regulation, Africa is still a bit of a grey area compared to Europe and the US. For an investment bank, the regulations are not yet clear enough to do business there.”
Because the company only offers private placements in Mauritius, regulation has not much of an impact anyway, according to Roosens. “All you need is a term sheet or a factsheet.”
For the time being Interpersona only works with issuers which are European or US based, according to Roosens. “We are not yet working with local banks such as Absa for example, which are fairly active in the market, and BNP also has a desk in South Africa. The local banks are not that advanced when it comes to manufacturing structured products. Investec can easily do structures but you cannot compare it with the possibilities at Soc Gen, BNP, Natixis, Commerzbank etcetera.”
When it comes to payoffs, investors are mainly interested in capital-protected products, according to Roosens. “In Mauritius we also see an appetite for credit-linked notes, products linked to the iTraxx with a conditional capital guarantee and a fixed coupon. In South Africa, because we work there with the offshore market, we also see capital protected products but then index-based, but also autocalls, phoenix-type products.”
Roosens believes the market in Africa will develop at a steady pace. “I don’t think it will go super-fast,” he said. “The market has yet to prove that it is profitable for investment banks to take a more active role. I think that more issuers will become active in the market, but it will not be plain sailing, we will see ups and downs.”