Structured products: the ripple effect
Structured product providers are becoming an increasingly important hedge fund investor group. But some regulators are concerned they may be exacerbating liquidity risk mismatches. By Christopher Jeffery
The structured hedge fund business has grown rapidly since the first major deals were struck in the mid-1990s in Japan. The market services retail, private banking and limited institutional appetite for enhanced returns over traditional equity and bond holdings, while also offering portfolio diversification and, in many cases, capital guarantees. Most major dealers now offer structured hedge fund investment products or hedges to distributors via their derivatives teams. And the market is
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