In a year where Asian investors lacked the appetite for directional bets outside of fixed income and private equity, private banks intensified focus on the idea of cross-asset investments, in an attempt to diversify client portfolio risks.
Call it first-mover status but cross-asset culture has been embedded in Société Générale’s DNA since it took an agnostic view towards asset class outlooks since 2009. According to Edward Lee, Société Générale’s head of cross-asset solutions sales for private banks in Hong Kong and Singapore, the cross-asset mandate and culture spans across its engineering and post-trade services teams.
“[The upkeep of this culture] requires large investments in infrastructure to ensure that our processes remain homogeneous, regardless of the underlying asset class of the structured products we offer,” he says.
More than just a manufacturing vanguard, Société Générale has actively enriched private banks’ platforms with new and innovative ideas, most recently with a reverse convertible note on a dollar-linked constant maturity swap.
“The product changed the notion of typical long-dated rate-linked products by introducing an equity-styled payoff to interest rate investors who were hungry for yield in a low-rate environment,” Lee explains, adding that the structure is now widely traded in Hong Kong, Singapore, Japan, Korea and Taiwan.
Looking forward, Lee expects the series of potentially market-moving events in Italy, France and Greece to impact Asian investors and has responded by adding three market strategists who aim to bring the best of the bank’s Asia capabilities to the international markets and its global capabilities to Asia.
“We believe our clients will need more insight and analysis to navigate such a changing world,” Lee urges.
In recognition of Société Générale’s pioneering status in the region’s cross-asset frontier and appreciation for the infrastructural nuances required to successfully fuel this engine, private banks in Asia have named Société Générale this year’s Best Provider of Cross-Asset Structured Products.