09.29.11 Bloomberg Brief | stRuctuREd notEs 5
Deutsche Bank’s akshay prasad on Structured products in asia after lehman’s Demise
Akshay Prasad, vice president at within portfolios has been reduced sig- most clients. in the ultra high net worth
deutsche Bank Private wealth man- nificantly, which has made sell-offs in the segment, clients are very interested in the
agement in singapore, talks about how markets less troublesome for a lot of clients. market dislocation trades that are possible
the fallout from the Lehman Brothers the majority of the structures sold after the when there is a squeeze in the market.
Holdings Inc. bankruptcy affected the crisis have been short-dated income-gen-
structured note market in asia and which erating structures with discounted strikes, the Lehman minibonds default hurt the
products are most popular there. Prasad, as opposed to participation-type structures. reputation of structured notes in Asia,
who provides wealth management advice the market has also seen a significant shift especially in Hong kong and Singapore.
to clients, conducted an e-mail interview towards fixed income and credit, with bonds Are the effects still being felt?
with Benjamin Garvey. and credit-linked structures becoming fairly yes, there is an increased focus on the
popular, again sticking to the income-gener- sales process today – even within private
How did you get involved with structured ating theme. banking – because of both internal and
notes? external regulators. through multiple pro-
who are your clients and how do they cesses, this has helped ensure clients are
i started working with structured prod- use structured products?
ucts at Citi about six years ago. i moved better informed of the risks and rewards of
to Deutsche Bank in 2007 the thought our clients are high net worth and ultra trades. overall it has made the process a lot
process behind derivatives appealed to high net worth individuals who we are more rigorous in terms of protecting clients.
me. it was quite clear at the time that in the allowed to deal with under the relevant now more than ever, clients themselves are
wealth management business in asia there laws. Most clients use structured products aware of the risks brought on by leverage.
was huge demand for products, and a lot of to generate yield or to take views in the mar- and they better understand the need for
opportunity that clients could only access ket. However, the clients in the ultra high net diversification across asset classes and
through the derivatives space. worth segment also use the structures to products.
hedge risks from future cash flows and real
does the Asian structured note market estate holdings, and to monetize market what are the recent trends in the Asian
differ from those in the U.S. or Europe? dislocations. structured note market?
European clients tend to be more con- Post crisis, the business saw a shift toward
what are some of the most popular income-generating structures. i think it will
servative on the payoffs, focusing more structures?
on wealth preservation. and they tend to be this way for some time to come, given
be more comfortable with longer-duration short-dated equity-linked notes, fixed- current volatility, the issues in Europe, and
structures and managed products. in asia, coupon autocallables, currency-linked notes growth concerns in the U.s.
clients tend to shy away from longer-dated to rebalance portfolio base currency risk,
structures, preferring to have the flexibility to credit-linked notes: these are popular with This interview has been edited for length.
make decisions on an ongoing basis.
Are the structured products sold in Asia Akshay Prasad
today different from those sold before
the global financial crisis? age: 30
the financial crisis was a troubling time previous experience: Citigroup inc
for all asset classes. there was a lot of risk
analysis and learning through the event. i education: National university of singapore
think clients spend a lot more time analyz-
ing the risk of trades. also, the leverage
Essential news & insight… Bloomberg Hedge Funds 03.29.11
Main Story hedge fund Story titlwin Story
Tuesday Hedge Fund Returns
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