SRP Apac Awards 2022: Personality of the Year - Lavanya Chari

Chari (pictured) joined HSBC Private Bank as global head of products, investments and collaboration in 2020. Based in Singapore, she leads the UK bank's private banking and wealth product strategy and the global investment products team.

Chari has a track record on wealth products and structured investment solutions, as well as working with a broad range of clients including retail distributors, private banks and sovereign wealth funds. She joined HSBC from Deutsche Bank where she was global head of products and solutions for private banking.

Growing up in Chennai, India, she studied aerospace engineering for her undergraduate degree before pursing an MBA. Following an internship with Lehman Brothers in Tokyo, Chari got an offer to join Deutsche Bank in London.

At HSBC, we continue to invest in infrastructure, information technology and training of our relationship managers - Lavanya Chari

“I went through a rotation programme as a graduate trainee and found that I really enjoyed the structuring desk,” she says. “I could put my mathematical and engineering background to use and also focus on the people element, as I enjoyed working with people and building relationships.”

She started her career in rates structuring in London in 2002 and went on to run that business on the asset side for Europe, across private banking and institutional clients. In 2009, Chari began to run the commodities asset structuring business globally for Deutsche out of London, across institutional and private banking clients.

In 2012, she decided to move to Singapore where her responsibilities expanded to include structuring and structured sales. “I ran the two segments for the same client groups across FX rates, credit and commodities,” she says.

In 2016, Chari moved to the private bank within Deutsche to capitalise on the wealth management opportunity in Asia.

“I ran products for Apac for the wealth business before taking on that responsibility globally within Deutsche. Finally, two years ago I decided to join HSBC for an exciting opportunity to enhance the global wealth proposition for the bank,” she says.

How was the environment for structuring back in early 2000s?

Lavanya Chari: It was an aggressive environment on the trading floor in London. It was also a period of significant growth for the structured products industry and I enjoyed the product innovation aspect and the opportunity to drive business and work with different parts of the bank. A combination of those factors made me choose and enjoy working in structuring for the first few years of my career.

What made you want to move to Asia in early 2012?

Lavanya Chari: A couple of reasons. Despite being from India, I had never worked in the region prior to that. I was keen for an opportunity to work in Asia and learn more about the region. Secondly, at that point, Europe had just gone through the sovereign crisis while Asian economies were in a growth phase.  I wanted to understand, contribute to and be a part of this growth story.

On a more personal note, I was keen to experience the different cultures in Asia and travel more around the region. While it is one big continent, each country is extremely diverse with its unique culture and heritage.

What challenges did you encounter during the shift from the sell-side to the buy-side?

Lavanya Chari: When I moved to the buy-side, I wasn’t too familiar with that side of the business in my early days so it was a steep learning curve. I obviously knew about the private banking and wealth management industry from the other side, but this was my first time working in it. I found it exciting as it felt like I had moved to a different industry for a new experience.

How has the Apac structured product market shifted since your relocation in 2012? 

Lavanya Chari: Compared to ten years ago, I’d say that structured products has now emerged as a core asset class. The behaviour of wealth management and private banking clients has shifted from being just equity-markets driven and primarily speculative in nature, to now being more receptive to using structured products for different purposes like cash alternatives, yield enhancement, portfolio hedging and diversification. The clients’ level of sophistication and knowledge has also increased significantly over the years while the variety of payoffs and underlying assets has expanded a lot.

At HSBC, we continue to invest in infrastructure, information technology and training of our relationship managers to ensure that we can cater to the growing needs of our clients. We have now automated a big part of our pricing and execution capabilities so that our staff can devote more time to offer customised structured solutions. This year, we rolled out structured products tracking a hedge fund basket in the form of a call option and equity dispersion strategies, which served as portfolio diversification instruments. They have worked well in the current market backdrop. We also offered the assets in option format, so that clients can limit their cash outlay. Moreover, we’re in the process of offering far more digitally enabled execution platforms.

How big is your team? How has your experience helped in the HSBC role? 

Lavanya Chari: The Investments & Wealth solutions [IWS] team which I manage has around 1,200 employees globally. My past experience in products has helped considerably as it has allowed me to drive the business, ensure that the team is innovative and comes up with relevant solutions for our clients, which matches what clients are looking for, rather than imposing ideas that are irrelevant.

How are structured products covered at IWS?

Lavanya Chari: Structured products are covered within the capital markets team by around 50 specialists, spread across Singapore, Hong Kong SAR, London, Geneva and US. We have an investment-led approach where we tend to come up with solutions for our clients based on the chief investment office (CIO) view.

What structured product focus would you highlight under your leadership at IWS?

Lavanya Chari: At HSBC, my team and I have been focused on two key areas within structured products. First, we have worked on the diversification of the business so that the underlying assets have not been just equities. We have also focused on interest rates and credit linked products.

Technology is the second big piece of work, one that I’m very passionate about. We have initiated many IT projects with the aim of improving client experience, shortening the time to market of our product ideas and freeing up our resources to focus more on customer service. I’m pleased to share that we recently launched online trading for structured products in Asia on our private banking mobile app. We are the first in Asia to offer private banking clients the option to trade fixed coupon notes via mobile. There will be a self-directed journey where clients can price their own terms and trade on screen. This is supported by an infrastructure that’s connected to all our structured products trade counterparties so the clients will get the best tradable price from all of HSBC Private Banking’s counterparties on the mobile app.

How much structured products did WPB trade in 2021? By market, flow type and asset class.

Lavanya Chari: While the main asset class in 2021 for structured notes was equity, we managed to diversify our offering into FX, fixed income, credit as well as repackage solutions and quantitative investment strategies [QIS]. Moreover, within the equity space, we saw more interest in non-standard, non-flow products.

How has the structured product business fared year-to-date?

Lavanya Chari: The business has been resilient. The equity part was obviously challenging in Q1 22, but we did make up for that in different forms. For instance, the rates and FX business picked up. The non-flow business was also healthy. The current market environment is clearly challenging. There are many headwinds, such as inflation, Covid-19 and geopolitics.

Nevertheless, our view is that we do not expect recession or stagflation in the global economy at this point and therefore, our advice to our clients has been to build resilient portfolios, focusing on quality, income and diversification. We are also aware that our clients need more frequent updates during these volatile periods and so we constantly communicate with them on significant market moves.