Mixed results for sales of SG's 'gemstones'

SG, the investment banking arm of French bank Société Générale, is seeing mixed results this year from its sale of equity-linked structured products to the European retail market.

Stanislas Debreu, SG’s global head of equity sales and derivatives markets, said interest in one of his new products, Sapphire, from distributors of retail products has been relatively slow to develop. “We’ve had a couple of hundred million euros out there but nothing as significant as we have seen in the past with Everest, Altiplano or Kilimanjaro,” said Debreu, referring to the bank’s ‘mountain range’ series it has rolled out over the past four years.

SG launched two new structures earlier this year called Sapphire and Emerald, marketing them as the ‘gemstone’ range. Unlike SG’s previous products, Sapphire does not come with a capital guarantee. Instead, investors are offered the possibility of gaining at maturity additional leverage on their portfolio.

“Instead of saying, OK, you get a capital guarantee at the end, we say forget the capital guarantee and if markets go down we give you more and more equity,” said Debreu. But he admitted a capital guarantee is a key selling point for retail structures.

This is reflected in sales of Emerald, which does come with a full capital guarantee. Debreu said he has sold between €1.5 billion and €2 billion Emerald products since their launch in March.