Structured Products AND MONETIZATION OF ASSETS
Skycastle Investments Structured products
your structured product specialists in south Africa
What is a structured product?
A structured product, also known as a market-linked investment, is a pre-packaged structured finance investment strategy based on a single security, a basket of securities, options, indices, commodities, debt issuance, or foreign currencies, and to a lesser extent, derivatives.
Why should one invest in a structured product?
Each structure is tailored with its own set of parameters from extra kicker to capital protection Underwritten by top tier investment banks Risk: Safer net for uncertain markets Diversification: Access to different markets, currencies and thematic’s
structured products & monetization of assets
protecting either stock specific or entire portfolio’s from downside risk & extracting liquidity from the structure providing you the ability further diversify your portfolio locally and globally
Introduction to collars/fences
- High Net Worth clients are unaware of the tools at their disposal.
- Clients can [protect their investments through various structures i.e. Collars, while maintaining large potential upside and protecting 100% of their downside
- alternatively protecting a portion of their downside in the underlying share or portfolio i.e. 90% or 80% collar structure
- reasons to collar include diversification to reduce concentration risk and market risk
- assets are pledged and not sold: therefore no cgt event is triggered
Should clients not need protection all the way to zero, they are able to protect the asset down to a certain level. therefore having the ability to participate in a lot more upside.
- the above two structures can be tailored made to suit client risk profile and expectations
- clients could also monetize their assets (create liquidity) on the back of these structures – with the respective banks.