Equity derivatives: innovation times two
For the second year in a row, Natixis has been named “Most Innovative Investment Bank for Equity Derivatives 2017” by The Banker. This international award reflects the ability of Natixis’ equity derivatives financial engineering, sales and trading teams to provide new solutions for their clients. It is also clear recognition of the range of innovations provided to institutional clients, private banks and major retail banking networks.
Responsive services to address the current complex financial context
Our investor clients are faced with a tough market context and increasingly complex regulatory constraints, while also having to deal with low interest rates and difficult volatility levels. It has therefore become particularly challenging to generate performance while keeping a grip on risk. Our equity derivatives teams turn these limitations into opportunities by providing each client with a solution to suit his/her individual investment strategy.
Investment solutions tailor-designed for our clients
Natixis’ equity derivatives teams design investment solutions on equities, indices and funds covering the full spectrum of risk/return profiles (capital guarantee, leverage, etc.) to meet the specific aims and profile of each individual client: insurance companies, pension funds, private banks, distribution platforms, wealth management companies, etc. We have entirely overhauled our business set-up to focus on a fully client-centered approach. We therefore gave the sales role its rightful key place in our set-up and placed financial engineering at the very heart of our approach. Our sales, financial engineering and marketing teams work hand-in-hand to provide high value-added solutions that really make us stand out from the crowd.
>> Targeted solutions tailored to meet institutional investors’ specific requirements:
The equity derivatives team designs financial products for institutional clients, including dividend-indexed solutions, multi-asset class solutions (e.g. equity + FI) and alternative solutions to money market products (Zéphyr range).
Recently added products include:
- Magenta: a product range designed for French insurance companies
To address regulatory challenges facing French insurers, Natixis launched Magenta, a 4-year investment solution offering a guarantee of 90% of invested capital at any time.
- Zéphyr Max: an innovative investment solution for institutional investors
This solution is part of the Zéphyr range, which consists of investments carrying yield based on the money market rate and enhanced by the guarantee from the underlying equity portfolio. Zéphyr Max is innovative as the underlying stocks are illiquid. They are shares that have recently been issued on the market when one company takes over another: they are unmarketable for five years and carry an additional discount. Zéphyr Max was structured as a five-year investment with an attractive return, allowing investors to benefit from the lack of liquidity premium.
Innovation at the center of our customized product offering
>> Teams are also active in creating new indices:
Natixis has also developed a range of index alternatives to traditional benchmarks such as the CAC 40 or the Euro STOXX 50. These new indices combine different asset classes and are based on the expertise of both the equity derivatives financial engineering team and CIB’s Economic Research department. They are of equal transparency to standard indices, but enable Natixis to significantly improve the quality of its structured products by offering investors higher yield with identical risk.
This new range houses all the bank’s indices and also includes exclusive distribution of indices built in partnership with Euronext, STOXX, FTSE Russell, Standard & Poor’s, Solactive and Nasdaq. Natixis is particularly involved in the creation of SRI climate responsible indices including a selection of companies committed to reducing their carbon footprint. The Euronext COP5E index, approved by the SRI Research department, is just one example, as it offers investors exposure to a selection of 50 European stocks committed to the fight against global warming.
>> New platforms to work alongside our clients right from the creation of the financial product range to their sale
- E-MAPS pricing platform: creating a financial product has never been easier
In 2015, we rolled out E-MAPS, an on-line platform that enables professional clients to access around twenty investment formulae and more than 800 international underlyings (equities, indices, ETFs). This online pricing system enables clients to independently compare potential performances for products they are working on and also gain access to a selection of investment ideas related to current developments on the financial markets.
- MOOC for the roll-out of a sales campaign: familiarizing sales teams with financial products eligible for securities accounts, share savings plans, and life insurance.
Natixis broke ground in 2016 as it set up the first MOOC on structured products, and the bank continues to develop its digital training programs for distribution network clients to help them better understand the tough market context and enhance their risk management skills, while deepening their insight into opportunities offered by these alternative investment solutions.
The success of these various products is a result of Natixis’ specialist equity derivatives teams’ extensive expertise and proactivity.