FEATURE | Q&A
Vestr: many structured products issuers are doing AMCs The software provider focusing on actively managed certificates (AMCs), which expanded to Singapore via a partnership with Julius Baer in 2021, sees structured products at the centre of the growth in the actively managed products space. “Overall Decentralised Finance is of interest to AMC investors,” said Wagner. “Institutional investors like to use AMCs to access crypto [and other digital assets] instead of opening up a wallet.” Most of the activity around AMCs continues to come from external asset managers that already have used structured products before. However, this wrapper is also being deployed by issuers seeking to leverage their existing capabilities. “Many structured products issuers already do AMC business because, for them, it's an easy way of diversifying their offering and leveraging their knowledge,” said Wagner. “They have done delta one and have an existing issuance vehicle, so it's pretty easy for them to get into the AMC business.” The market growth also comes from new securitisation vehicles or special purpose vehicles (SPVs) set up to enable AMC issuances but also a whole range of investment vehicles, from Ucits to limited partnerships.
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RP spoke to Stefan Wagner (pictured), the company’s head of business development, about the appeal of AMCs and defined outcome structured funds, as well as autocalls, trends and themes in the structured products market.
According to Wagner, the fact that many issuers of AMCs have adopted the firm’s platform suggests this is an area of growth in the market. “These structured products can be listed or are one-off OTC trades,” he said. “Several structured product houses focus on offering structured products inside AMCs - many of their AMCs use structured products as part of the underlying portfolio.” The AMC is also often used to provide access to assets that are difficult to access. For example, strategies on cryptocurrencies and providing liquidity for mining or staking.
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“For the bulk AMCs, between US$1 to US$50 million, it is not worthwhile setting up a fund,” said Wagner. “But we also see other issuers who have US$100 million in one AMC – these are often from big players with a successful strategy with an internal distribution, plus they can offer investments that take too long to implement in a fund. “Many themed investments are done via AMCs because, by the time the fund is up and running, the investment rationale for the theme has already been realised.” Most of the AMC activity seems to come from Switzerland, but there are other jurisdictions where AMCs are also popular, like Luxembourg and Liechtenstein. Where is the issuance and investing coming from? Stefan Wagner: There are always three parties involved in an AMC – the issuer, the external asset manager and the investor. All three parts can be in a different region. From a booking point of view, Switzerland and Singapore are probably the biggest markets for AMCs in the world. That comes from the fact that people outside that country often use
