CORNERSTONE CAPITAL SOLUTIONS CASE STUDY
A group of clients we service are the independent asset managers. These managers have to deal with regulatory issues (rising compliance costs), volatile stock markets, data protection and negative interest rates. We were able to help with this topic of negative rates, with the help of one of the largest investment banks in the world!
How we helped structure an investment product, solving a part of the problem of the asset managers
We speak a lot with independent asset managers. The managers are responsible for the investment portfolios of their clients. In some market circumstances those managers want to ‘go cash’ with part of the portfolio of their clients. Due to negative interest rates, the clients are charged negative interest on their credit money. With other words, clients have to pay money on their cash.
CORNERSTONE CAPITAL SOLUTIONS IS HERE TO ASSIST
Clients of asset managers do not want to pay money on their cash, held by the brokers or clearing banks. Asset managers need to go cash, when they expect the markets to fall, and do not want to be forced to be invested all the time. Here’s the challenge: how can the asset manager satisfy his client and still be able to ‘go cash’. We did our research, talked with many professional investors. We used the outcomes of the research to have our discussions with a specialized investment bank.
We asked our partner, the investment bank, to create a product which can be used as a cash alternative. Parameters were: low volatility (2%), low target return (2%), low risk, daily liquidity, exchange listed and low minimum investment. The bank created, based on the parameters, an actively managed certificate with all the specifications mentioned before. This AMC was launched on the Dutch market, and the first asset managers clients are already invested. We made sure the ACM is listed with most of the brokers and banks in the Netherlands, tradable on a daily basis with a low risk.