Reaching for the man on the street
Demand for structured medium-term notes, particularly equity linked, has exploded over the past two years. Yet it is retail buyers rather than sophisticated institutional investors who are purchasing these complex products. It’s not just the investor profile that has changed. The route map for the origination and distribution of structured debt is being redrawn too. In the heart of euroland some surprising new players and alliances have emerged to service structured debt’s most important new client: the man on the street. Mike Tims reports
If you had ventured into any of Banque Générale du Luxembourg's 40 branches across the Grand Duchy this summer, as likely as not a glossy poster featuring the symbols of power generation would have caught your eye. "Energize your portfolio!" it urges, with the purchase of Protected Sector Notes 10: Top 15 Utilities. This is the latest in a series of similarly branded and marketed issues that provide investors with principal-protected participation in the gains of an international basket of leading equities in particular sectors.