The Apac Personality of the Year Award 2023 was presented to Jung-Jin Yoon at the 10th Apac Awards Ceremony, which took place on the evening of Wednesday 3 May at the Hilton Singapore Orchard.
Yoon, managing director, head of cross-asset sales & structuring for Apac at Société Générale (SG) received the highest number of votes from respondents to the SRP Apac Awards Survey 2023.
Growing up in Montreal and New Jersey, Yoon, a native of South Korea, returned to the country to pursue his bachelor's in business administration at Yonsei University in 2002 and served a two-year conscription before kicking off his career at Macquarie Bank as a corporate finance analyst in Seoul in 2007.
Once you have better client proximity, it leads to better discussions on product innovation and an enhanced understanding of market opportunities - Jung-Jin Yoon, Société Générale
One year later, the recent graduate, who enjoyed working in an international environment, joined SG's Hong Kong office because of a close acquaintance who introduced him to global markets, specifically the derivatives space.
"It was a simple decision taken 16 years ago. I'm quite happy where I am right now," Yoon told SRP.
The word 'natural' was used several times when Yoon looked back at his trajectory at SG where he started in equity derivatives (EQD) sales support for the Korean market and now manages approximately 100 cross-asset sales and structurers in Apac.
The cross-asset set up was launched as part of a global shift at the French bank triggered by then SG boss Christophe Miané in 2009.
In 2013, Yoon relocated to South Korea overseeing the third-party distribution after SG obtained the relevant regulatory licences for its onshore operation where structured products were the first leg of the local expansion, followed by market access and flow activities.
"It's a team that's very dear to me," Yoon recalled, referring to the local setup. "We started from scratch - building the local infrastructure, transferring the activities from HK, and repositioning our franchise.
"Once you have better client proximity, it leads to better discussions on product innovation and an enhanced understanding of market opportunities. I'm hoping that we are able to replicate this in every market."
Yoon accesses market opportunities from three main angles - product opportunities, client demand and regulatory framework.
"In Korea, demand for structured products was high as there was a surge in demand from retail investors wanting a boost in income amid very low interest rates back then, not to mention that the regulatory environment was less strict compared to what we see today," he said.
Initially the market was "very binary" and products available were autocalls either with or without correlation on single stocks.
"There was no big shift in investment sentiment and consequently this a very standardised flow business," Yoon said. "Even with a cross asset mandate, there was not much to explore initially as a significant portion of market investments were in equities."
The award was presented to Samuel Henry on behalf of Yoon
Looking back, SG was one of the pioneers in building up the interest on fixed income among high-net-worth individuals in South Korea, according to Yoon.
"It was during my time in Korea where I experienced the value of being cross-asset and how powerful that setup is," he said, adding that the strengths are reflected in product innovation and capabilities besides an ability for sales to tactically pivot based on market conditions.
After nearly five years in Seoul, Yoon went back to Hong Kong in late 2017 where he embarked on a "natural transition" to regional roles with step-by-step exposure - from private banks to consumer banks in Singapore and Hong Kong SAR, then to Taiwan, China, Japan and then to institutional coverage.
Commoditisation
"The Apac market has clearly grown, but at the same time it’s become much more challenging in some markets over the past 10 years," he said.
One example is the massive standardisation and automation of structured products, which're reflected in smaller trades, higher volumes, less direct interaction with clients but more with third-party multi-issuer platforms, according to Yoon.
"Certainly, the business is more operationally-efficient today but also too commoditised leading to somewhat of a binary market and a loss in sales DNA," he noted.
Ten years ago, one client sent one email for a single pricing request at a time. Nowadays, a batch of 100 pricing requests takes no more than a few minutes.
"The sheer capacity to mass price and market these products came much faster than most envisioned," said Yoon.
Post-Covid 19
Since 2020, the industry has shifted towards fixed income from equity.
"While we hope to bring more product impact on this space, it’s somewhat disappointing to see that not many Asian investors really embrace long term structures, which thereby leave limited room for product innovation," said Yoon.
The momentum on fixed income has slowed down this year whereas the rebound on Asian equities hasn't fully materialised.
"Q1 23 was not an easy one. A lot of the markets continue to trade the same products that were traded when rates were near zero," he said. "This overall transition is taking longer than what we had hoped for. It's a key focus on our agenda for this year."
In terms of traded notional of structured products, fixed income underliers were up approximately 50% while equities including multi-asset were down around 20% in Apac in Q1 23 year-on-year.
"The Japanese market was heavily hit due to the ongoing regulatory scrutiny since H2 22, which we expect clarity going into Q3 23. It remains a key pillar for SG in conjunction with Korea, Singapore and Greater China," he said.
Apart from fixed income, quantitative investment strategies (QIS), environmental, social, and governance (ESG), thematic indices and hybrids were little known back 10 years ago.
Typically, each year sees one to two products with a strong market impact - whether it be on a tweak payoff or a new concept, according to Yoon.
"Unfortunately, given the context of the markets - I don't think we've had that in the past year. [This] is something we need to rectify," he said.
Cautious approach
Structured product sales is a complex product type that requires a mix of sales capabilities, product depth and understanding of the trading fundamentals.
"It’s a role that needs to be very risk-conscious, whereas we have seen numerous profiles in the market who approach this business from a brokerage standpoint, which we don’t find to be a sustainable model," he said.
For many investment banks, structured products are no longer a business driven by market share, according to Yoon.
In February, SG rejigged its cross-asset franchise in Apac which is currently led by Yoon by merging its structuring and sales teams - the sales team is mostly localised in the bank's coverage locations while structuring has been consolidated in Hong Kong SAR and Tokyo.
"We want the structuring team to be client-facing and having the proximity as the sales do," he said. "Some banks have structuring and sales governance separately whereas some are combined. Ultimately, it's a matter of how you align the business strategy."