Credit Agricole Group has cemented its position in the French structured products market and further enhanced the range of instruments it offers to retail clients and high-net-worth individuals during 2007. The group is the uncontested market leader in France, having launched 21 structured funds for a total of EUR6.4 billion by mid-September and issued seven of the 10 largest funds in the market this year.
Credit Agricole had managed to increase its market share of assets under management to 29.5% by July 2007, up from 28.3% at the end of last year. Furthermore, total market sales of structured products have shot up to 41% of the market this year compared to 32% last year.
The group's success is based on tailoring solutions to its client base, whether they are retail networks of the group's LCL (Le Credit Lyonnais) or Credit Agricole regional bank brands, or high-net-worth individuals from the private banking arms of LCL Banque Privee or Credit Agricole's Banque de Gestion Privee Indosuez (BGPI).
"We have a strong geographical position in France and the expertise and experience to create products that fit each client segment in the market and each brand within the group," says Christophe da Silva, product development and marketing, Credit Agricole Structured Asset Management (Casam).
Juliette Nigrelli, head of operational marketing, banking networks and private banking at Credit Agricole Asset Management (Caam) explains that the group has a close affiliation to its networks in the design process of any product. "There is co-operation between the structurers, sales people and end clients to work on ideas. We are very careful that everyone involved in the selling process and the clients themselves truly understand and are comfortable with the products we offer. It is a long-term process but we need to ensure we have the right product and one that really does correspond to what is needed by our clients in the market," she says.
"Our success is built on the fact that the product design is really driven by the clients and their needs," adds Yannic Raulin, head of structuring for France at Casam.
This is borne out in the big success story of this year represented by the Jayanne range of life insurance structured funds, particularly Jayanne 4, which, at EUR2,145 billion, is the largest structured fund to be launched in France and had a whopping 220,000 clients.
Catherine Leroy, co-head of product marketing at Casam, explains that the Jayanne range was created to answer a specific need of Credit Agricole clients. "We tried to find a concept that would reassure clients and give them more money than the simple (non-unit-linked life insurance) Euro Contract they were previously invested in. We have been helped by the Fourgous amendment, which allows clients to transfer savings from Euro Contracts to unit-linked life insurance contracts without losing tax benefits," she says.
The Jayanne product has become a mainstay in the market. New funds are launched on a quarterly basis as clients have become comfortable investing in the product. Jayanne 5 and 6 added a new autocallable feature in response to investors' demand for shorter-term products, says da Silva. Here, there is an early redemption at the end of year five if the worst index is above its initial level and investors receive their capital plus 30% performance.
The group is also targeting high-net-worth individuals of the newly created LCL Banque Privee with a range of specially designed products. The LCL Paradoxe 2012 is a five-year structured product that is not capital guaranteed and is linked to the performance of the DJ Eurostoxx 50. This allows a client to benefit from either an increase or decrease of the market and the client receives 100% of the fall of the market, which is capped at 40%. "This is a new strategy and we wanted to design something that would be a flagship product for the new organisation of LCL high-net-worth clients," says Leroy. "The innovation and story of the product is simple - you win if the index falls or rises."
High-net-worth individuals of Credit Agricole's private banking arm BGPI are also being targeted in a similar fashion with the Vendome Quintuple Opportunite range of autocallable structured funds. Four such funds have been launched this year, offering an 8% annual coupon and redeemable if the index rises above a certain level after each year. There is also capital protection unless the index falls by more than 40%. "It is a very interesting product because it is a real compromise between the fact that financial markets are a long-term investment and the fact that people are looking for short-term maturities. This product succeeds in marrying these two principles and has been a success with private banking clients," says Leroy.
The week on Risk.net, March 10-16 2018Receive this by email