The structuring of investment products with an above average risk-return-profile continued to be difficult due to the ongoing capital market dislocation in conjunction with the further tightening of national and international regulation. In result of increasing official requirements and inherent volatilities, investment funds in particular majorly do not achieve the return as projected in the fund prospectus.
For new issues repayment and a minimum return can – under certain preconditions – be guaranteed to a level that is usually above the expectations of investors. In addition, a lower volatility enhances the risk appetite of debt providers.
Amongst others, STAHLMANN RiskFinance Solutions has consulted an alternative investment fund in putting a capital repayment and interest guarantee related to a portfolio of Renewable Energy Assets by means of structured insurance in place. Over a 15 year period the fund could limit his earnings volatility, leading to a minimum return after cost. By this structural element the fund stands out from his rivals. The institutional investor achieves high planning security facilitating the investment decision.