Goldman Sachs’ commodity derivatives and structured products stole an edge this year due to a globally-coordinated set-up designed to close the lag-time of importing ideas and solutions to private banking clients, be it from speculators or institutional demand. Backed by a global research engine in an asset class that Goldman Sachs has traditionally dominated, as well as a plethora of sales and trading professionals including a 25-strong team in Asia Pacific ex-Japan, the robust movement of intellectual capital has never proven to be more essential than in 2013.
In a year where Goldman Sachs observed private clients beginning to adopt the investment characteristics of institutional clients, such as plays made on crack spreads – the price differential between WTI crude oil and Brent Crude Oil – response time was crucial. Given that such dislocation trades tend to have small windows of opportunity, timeliness and promptness of information flow is key to success. Indicative of Goldman Sachs’ deep understanding of clients’ preference for a fully-packaged play rather than ‘may separate’ plays with multiple derivatives, crack spread products were offered in warrant form in order to directly trade the price differential.
Telling of its strength in the commodity derivatives space, Goldman Sachs’ Asia unit offers more than just the commonplace underlyings and solutions to its private banking clients. Goldman Sachs’ shelf boasts what the region would consider niche assets, such as agricultural commodities or base metals, despite market sizes that are dwarfed by Asia’s zeal for trading in energy and precious metals.
From a plain vanilla autocallable on corn to proprietary algorithm-based products on soybean, Goldman Sachs’ ability to swiftly capitalise on a technically-driven asset class while meticulously packaging products with client predilections in mind has helped capture a greater share of high net worth investors’ wallets. In turn, private banks have voiced their opinions and voted Goldman Sachs as the 2013 Best Provider of Commodity-linked Structured Products.