Societe Generale has begun marketing structured credit products to institutional investors in Asia and Japan, and believes managed 'constant proportional portfolio insurance' CPPI strategies will prove popular in 2006, says Francis Repka, regional deputy CEO for corporate and investment banking in Hong Kong.
Tight spreads in global credit are driving a trend among institutions to embrace structured products. Most institutional investors allocate to fixed income and they need yield enhancement, he says, adding this trend will continue even if interest rates continue to rise. He believes as long as interest rates remain below 5%, investors will be hungry for enhancing returns.
CPPI structures are designed to protect...
