Goldman Sachs set up its cross-asset industry group dedicated to the coverage of private banks and other intermediaries in Asia three years ago, pursuing a strategy of incremental growth and long-term sustainability, while building on the success of Private Investor Product Group (PIPG) in the Americas and Europe, the Middle East and Africa (EMEA). Today, according to the results of the Asian Private Banker Structured Products Provider Survey and Poll, 2012, it stands as the industry’s best commodities provider.For Stefan Bollinger, Goldman Sachs’ success may be attributed to the bank’s ability to produce simple products that are fundamentally-driven and intuitive to understand, all managed by a centralised desk, and underpinned by well-reputed research. “We still operate on lower levels than other banks but we are unique in the fact that we are independent from the equity-derivatives trading desk, unlike many of our competitors, which leads to better investment results,” says Bollinger.
Bollinger and his team of 25 sales, spread across the Asia Pacific including Japan, work closely with Goldman Sachs’ research arm to identify themes with a strong potential to add value to private banks. For example, hybrid market themes – commodity and equity or commodity and foreign exchange linked together and made into a structured product – have proven to be a considerable success.
Then there is the issue of timing. The market for commodity structured products has been growing since the financial crisis as investors – themselves looking for alternative assets – have become more familiar with these product-types in general. And at a time when private banking clients are considerably cautious about taking on extra risk, Goldman’s strong reputation clearly makes it a preferred provider. Bollinger explains that they are conservative to the extent that structured credit never qualified as an investment product for individuals. In fact, in 2007, Goldman Sachs had a more conservative framework than its does at present, and so it could comfortably expand its product offering due to a positive experience during the crisis.
And where a number of Goldman Sachs’ key competitors endured downgrading, the bank has emerged with a reputation as the industry’s “safest provider” of commodity structured products. “We undergo a lot of pain to ensure that clients’ needs are aligned with our product offering,” says Bollinger. Clearly, this strategy sets Goldman Sachs apart from its peers, making it the deserved winner of the Best Provider of Commodity Structured Products award for 2012.