New Zealand Fixed Income Forum 2006

Liontamer was pleased to be involved in the 2006 New Zealand Fixed Income Forum held in Auckland last week. The Forum attracted over 300 attendees and a host of industry participants. This year the Forum offered attendees not only the Fixed Income Forum but the New Zealand Investment Forum which was designed specifically for financial advisers and distributors to retail and high net worth clients.

Speakers included Hon Lianne Dalziel, Minister for Commerce (Forging Closer Trans-Tasman Ties) and John Keys MP, Spokesman for Finance, National Party (NZ Opportunities within the International Financial Community). In addition there were several panel discussions on a variety of subjects including “Opportunities for Product Development in the NZ Retail Market”. This included Liontamer’s Laetitia Peterson who talked about innovations in structured products. The following provides a small taste of some of these innovations and provides an indication as to the types of assets and techniques that Liontamer is considering bringing to the NZ market:

• Innovations in terms of the underlying asset exposure – there are a host of different assets that structured investments can now gain exposure to – these include single stock baskets (the upcoming Liontamer Global Series 2 is an example of this), BRIC (Brazil, Russia, India and China) and other emerging markets, income producing assets and actively managed funds. In respects of the latter, this is now gaining pace overseas - Liontamer are able to gain exposure to some of the world’s leading global asset managers.
  
  
• Structuring innovations – perhaps the most interesting development is the ability to create open ended structures that also contain an element of capital protection. Characteristics can include exposure to a number of underlying asset classes (e.g. indices, managed funds), monthly liquidity and no fixed maturity date and the ability to continually lock-in say 80% of the highest net asset value on a daily basis. This type structure is likely to have greater appeal to portfolio investors who require funds that are continually open and greater liquidity.
  
  
• Sturgeon, Ladder or Himalaya? – The structuring innovations don’t end with open-ended funds – there are a wide range of techniques (and names) available to investors in structured products. For example, Himalaya is the name given to a technique that invests in say 5 different assets (global equities, property, commodities, property and emerging market equities) – in year one, it takes the best performer from year, locks in the gains and then removes from the basket. In year two, it takes the best performer from that year, locks in the gains and then removes that one from the basket and so on.