Former Mariner Financial manager and dealer group Premium Wealth Management has launched a boutique focusing on structured products.
Boutique asset management firm Instreet is to tap retail market interest in structured-product access to alternative asset classes and strategies with the launch of its first offering in May, with two more product launches slated for later this year.
Instreet's first product is a closed-end offering, capital-protected at maturity, providing exposure to 'soft' commodities through the Focus Momentum Index, a bespoke combination of equity and commodity futures custom-built for Instreet by Merrill Lynch.
The product will be offered though dealer groups to retail clients, with a minimum investment of $20,000. Over a term of seven years, the product will feature what Instreet managing director George Lucas described as "profit lock-ins": similar to a rising guarantee, as the market in the underlying assets hits certain trigger points, part of that gain will be locked in.
The product will have no liquidity for the first year, but after that Lucas expects to offer "exit opportunities on a semi-annual basis."
Instreet was established in January this year, after Lucas and his team left Mariner Financial. The venture has the backing of dealer group Premium Wealth Management, the members of which account for $2.5 billion of funds under advice, and a group of financial advisers. Instreet will generate its revenue from a fee-on-funds-under-management business model.
The genesis lay in asking financial advisers what they and their clients wanted from structured products, Lucas said.
"The first product, which is based on a commodity index biased to a soft-commodities-related Asian growth theme, reflects this approach, as will subsequent product launches."
Instreet's products will be managed by leading institutions and investment banks, Lucas said. On the research front, he said the products will be independently rated by leading research houses.
