STRUCTURING INVESTIBLE PRODUCTS
We Integrate Ideas and Investments into Investible Products
Certificates, as a group of structured products, are issued as tradable financial instruments backed by a single asset or a group of assets. The result of such securitization is a financial instrument that can be purchased globally through brokerage accounts.
We aim to advance the investment ecosystem for entrepreneurs and asset managers through structuring better vehicles. Our solution offers quick and flexible access to alternative assets and offers nearly no limits to investment strategies.
We simplify and streamline our clients' portfolio management – even non-conventional and non-bankable assets are now investible on a balance sheet-neutral basis. The timeline of all stages described below Is noticeably short compared to any other fund's structures.
"While structured products account for only 1% of the $700tn derivatives market, structured products still outsize the total ETF market ($5.3tn) and more than double the total hedge fund market ($2.9tn )."
Bloomberg Professional Service
AMCs have followed a strong growth trajectory in the last couple of years. In contrast to their fund counterparts, AMCs are set up within a few weeks, with only minor issue costs and offer ongoing cost advantages due to their efficient administration. Besides, these certificates are issued with an ISIN number, making them transferable securities booked with various custodians.
AMCs have become more popular because of the types of assets investors are willing to incorporate into them. Investors are also bridging asset classes by structuring hybrid products that include underlying from different asset classes, such as private equity and securitized investments. Exchange-traded funds and strategy indices, for example, are finding their way into products.
Many asset managers realize that the well-known and widespread fund structures are, in many cases, neither suitable nor efficient due to various limitations, including high set-up costs, restrictive regulatory conditions, and very narrow distribution access.
An alternative that overcomes such limitations and has become popular in Switzerland in the last decade is structured products known as Actively Managed Certificates (AMCs).
Perspective on suitable structures
Actively Managed Certificates - Allowing fundraising activities for Private Equity and funds for creating and distributing financial products.
Actively Managed Certificates (AMCs) have become increasingly popular in recent years. Unlike most other structured products, AMCs have unique features that allow active selection and adjustment of the components of their underlying strategy.
Tracker Certificates - Responding to challenges of funds' distribution
Through their ability to enable investments which would not be possible otherwise for regulatory reasons, or which would not be economically feasible, we see further exciting opportunities for Tracker Certificates.
The principle of the tracker certificate is like the AMC, but the usage is different. BONART uses Tracker Certificates primarily to follow existing fund structures, most of which are domiciled outside of Switzerland/EU. With the help of the Tracker Certificate, the performance of the fund can be reflected relatively quickly and cost-effectively and, in a first step, distributed to Professional Investors in Switzerland and Europe.
Our focus is on how to do it right
We strive to provide best-in-class advice and execution excellence in structuring financial investments in a manner that is conducive with the latest legislation and tax regimes. The result of our work for each client is an investible product with an extensive distribution reach across capital markets and territorial borders.
BONART offers entrepreneurs and growth companies, asset managers, family offices, and financial institutions an end-to-end service through a flexible platform to design and launch lean investment products.
“In our view, the current design of traditional funds and similar vehicles is too cumbersome and does not fit the digital world that is being created.”
While no two investors have the same requirements, our objective is to leverage commonly used structures, which we enhance using technology and in partnership with innovative service providers.
While performance remains one of the essential factors when companies are fundraising or investors choose a transaction or a manager, the ease of accessing and keeping track of their execution and performance is increasingly important. As a result, structuring and distribution are becoming just as critical to a manager's success as performance and should be approached with renewed vigor.
Like everything else today, AMCs are also benefiting from technology. The arrival of new technologies for contract representation, lifecycle management, and new pricing techniques has provided tools and processing power to structure the most complex of products.
A new perspective on finance
"We anticipate that with the digitalization of the investment supply chain, the solutions offered by asset managers and private banks will look substantially different from how they look today."
The spread of globalization, boosted by a breathtaking advance in technology, encourages greater specialization in financial services. It allows companies and funds to explore access to investors to enjoy a range of products for specific needs, accompanied by a renewed thrust in financial services innovation. Certificates, as a group of structured products, are the issuance of tradable financial instruments backed by a single asset or a group of assets. The result of such securitization is a negotiable financial instrument that can be purchased globally through brokerage accounts.
Insights:
The differentiation factors:
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Structured products proving their worth
The bar for investors' experience and access has been raised. A new generation of investors requires simple, straightforward, and cost-efficient investment solutions. We are also seeing many new entrants: ex-hedge fund managers, bankers, or money managers, launching new products and strategies and competing for a share of investable capital.
As the livelihood of an asset manager is mainly dependent on his ability to attract capital, his investment vehicles must be set up adequately to:
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meet the standards of the investors, and
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comply with cross-border regulations.
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Investment Product Structuring (the details of Bonart’s offering)
Actively Managed Certificates (AMC) have followed a strong growth trajectory in the last couple of years. In contrast to their fund counterparts, AMCs are set up within a few weeks with low issue costs for the asset manager and offer ongoing cost advantages due to their efficient administration.
AMCs are based on a dynamic strategy and require active management. The composition of the basket of underlying may thus change in line with the predetermined investment guidelines during the term of the product.
Actively Managed Certificates (AMCs) are an innovative solution to customize and implement an investment strategy with greater adjustability, cost efficiency, and transparency. The excellent high flexibility in terms of product design and the detailed price reporting are convincing arguments for the selection of this solution.
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Tracker certificate & activities of foreign funds
A tracker certificate is a certificate that reflects the change in the value of the underlying asset's price movement 1: 1. The underlying asset can be, for example, a share, a bond, a commodity, a currency, or a combination of different underlying assets.
Due to the captivatingly simple way they work, tracker certificates have, for years, been one of the most popular structured products. They trade in lockstep with the price movements of a given index. Most of these products are tied to recognized stock market barometers. Thus with a single investment in a tracker certificate, you can diversify your risk exposure across a wide range of financial assets.