institutional investors

2013 is set to exceed 2012 issuance for Natural Peril Catastrophe Bond Market

As the tenacious search for yield continues, uncorrelated alternative assets such as insurance-linked securities (ILS) have become even more desirable, with the opening quarter of 2013 showing growth of over 2%* on the ILS index.

Despite controversy around investing in catastrophe bonds, which saw near record issuance in 2012, traditional reinsurers struggled to raise rates during the same time, as the market remained well-capitalised. With many insurance agreements up for renewal, some industry experts are predicting that ILS' share of the non-life catastrophe reinsurance market will double by 2017.

The latest Insurance-Linked Securities for Institutional Investors report from Clear Path Analysis looks at what is attracting investors and the challenges to consider when looking at these assets.

Michael Stahel, Partner at LGT Capital Partners looks at the industry potential: “The current market for non-life catastrophe reinsurance capacity is about $180 billion; essentially the total capacity purchased in the reinsurance industry by primary insurance companies. Of this, the pure non-life cat bond market is roughly $14 billion, but add to that the $15 billion collateralised insurance market and it brings the total close to $30 billion. We believe that this number can grow considerably over the next 5-10 years and as a result, up to a third of the entire market around $50-60 billion of capacity, may be provided by investors by 2017.”

“There is no question that there is interest from investors to bring more capital to catastrophe risk as Investors are searching for assets that are not correlated to stocks or bonds,” remarks Greg Hagood, Founding Principal at Nephila Capital. “Activity in the private transaction market place has picked up noticeably since the financial crisis in 2008 as insurers are more sensitive to the embedded credit risk in a traditional reinsurance transaction.”

Dr Gero Michel, Chief Risk Officer** and Head of Risk Analytics at Montpellier Reinsurance (Blue Capital) contemplates the scope for generating long term profit within the catastrophe and reinsurance market: “The market will be profitable because the insurance market depends on catastrophe reinsurance; and no other line requires similar levels of capital to stay afloat. Not only this, large losses trigger capital shortages which are followed by premium, price increases and capital influx. For these reasons, catastrophe reinsurance in general is unlikely to follow the fate of other reinsurance lines which have remained in deficit for years.”

Looking at recent industry trends; Liz Frederick, Director of ILS Insurance Management at Aon Captive & Insurance Management adds: “The number of state-backed insurers that have come to market recently has increased, which is intriguing especially from an administrator’s perspective. It’s interesting to see what areas of the industry are attracted to the ILS market and who utilises the products and this will hopefully lead to further new cedants entering the market.”

Cory Anger, Managing Director at Guy Carpenter Securities points out: “2013 is currently on pace to exceed 2012 as sponsors continue to embrace the effectiveness of capital markets-based protection in their risk management programs. Conservative institutional asset managers, the custodians of trillions of dollars of investable assets, have largely accepted catastrophe risk as a component of mainstream investment strategy.”

Investment in ILS is considered to be complex and investors need to understand the risks associated with the non-correlated asset class. Dirk Lohman, Managing Partner and Chairman at Secquaero notes that: “Investing is difficult business – even for professionals. When one is confronted with a myriad of choices, there is a tendency to default towards certain key metrics when comparing multiple products all seemingly operating in the same space. Thus, it’s vital for investors to have a full risk distribution of potential outcomes for the investments being contemplated”

A clear educational process is required for explaining the structures and costs associated with accessing the market and Luca Albertini, CEO at Leadenhall Capital Partners warns “There are many risk considerations to be made when investing in ILS. In our opinion, the different types of risks embedded in the sector require a combination of insurance, structured finance and trading expertise as material inflow of capital into the sector has caused some volatility in generating mark to market gains for existing investors”.

Notes to Editors

Press Contact

Andrew Gates

Hume Brophy

+44 (0)20 3440 5656

clearpathanalysis@humebrophy.com 

• Issuance volume for Cat Bonds in first quarter of 2012 is expected to hit record levels

London: With Catastrophe (Cat) Bonds set for significant growth in 2012, the latest report on Insurance Linked Securities (ILS) by Clear Path Analysis, the independent publisher, highlights that institutional investors are increasingly considering allocating to the asset class as they seek to diversify their portfolios away from other, more mainstream financial market instruments, such as equities and fixed income.

Several significant global disasters happened in 2011; US tornadoes and earthquakes in Japan and New Zealand made it one of the costliest years to date, in terms of economic losses. Following this, the first quarter of 2012 saw the issuance volume for Cat Bonds hit close to record levels of $1.7 billion[1]. Pension funds are increasingly looking to invest in these non-traditional debt instruments - which are used to provide insurance and reinsurance capacity to underwrite risks of natural disasters - as a diversification tool.

At a time when global financial market volatility continues to challenge allocators to traditional equity and fixed income, funds and institutional investors are targeting new sources of reliable return. The report investigates the wealth of potential ILS opportunities including Cat Bonds, the traditional reinsurance and private transactions markets.

The Clear Path Analysis report Insurance Linked Securities for Institutional Investors looks at the market from a pension scheme and endowment fund perspective, examining the key issues and opportunities involved with investing in the sector. It includes insight from pension, endowment, asset management and consultancy professionals such as AXA Investment Managers, Nephila Capital, Clariden Leu and Secquaero.

Christophe Fritsch, Head of Insurance Linked Securities at AXA Investment Managers comments “At a time when institutional investors are grappling with the challenge of making economic predictions and taking long term bets on asset classes,  Insurance Linked Securities could provide an attractive investment opportunity. An investment particularly in Catastrophe Bonds can offer an important source of diversification on the asset and on the liability side for pension funds which have exposure to longevity risk on their liabilities but are not exposed to natural catastrophe.

“Given their appealing risk-return profile which is dependent on the occurrence of natural events and not linked to economic factors, inclusion of insurance linked securities in a portfolio of traditional asset classes could enhance the efficient frontier of the portfolio. Furthermore, by nature of their unique underlying risks and their low frequency, extreme loss distribution profile, catastrophe bonds are likely to remain a truly uncorrelated asset class yielding stable investment returns.”

Michael Stahel, Director at Clariden Leu Insurance-Linked Investments (will join LGT Capital Management in Q2 2012) remarks that timing is key when considering ILS: “The best time to invest in Cat Bonds is typically in the year after a very severe insurance catastrophe and 2012 is providing investors with a very interesting point because 2011 to date is one of the worst years on record in terms of insurance losses.

“Many don’t realize that 2011 was actually worse than 2005 which saw hurricane Katrina devastating the shores of the US south coast. Last year, we saw several extreme events, the Japan earthquake and tsunami, the New Zealand earthquake, a very severe tornado and hurricane season, as well as the flooding in Thailand, which all together, based on Munich Re’s latest assessments, totalled approximately 110 billion dollars of actual insured losses.”

Meanwhile Dirk Lohman, Managing Partner at Secquaero highlights the value of other ILS possibilities: “Cat Bonds only represent about a third of the total outstanding volume of insurance linked assets.  Even if one were to include so-called private collateralized reinsurance transactions and side-car investments in vehicles writing the risk as part of the broader ILS space, they would still only represent about 50% of the market’s current universe.”

“An issue with limiting one’s focus to catastrophe risk is that the risk being offered to the capital markets is relatively concentrated. Beyond alternative catastrophe instruments the largest potential lies in ILS where the underlying insurance risk is linked to the performance of life risks. This could be event driven, such as the risk of pandemic mortality or it could be portfolio based, such as the risk of a higher than projected mortality, morbidity or lapse behaviour.”

Greg Hagood, Founding Principal at Nephila Capital also looks at the wider ILS market: “When people hear ILS their minds immediately go to the Cat Bond market. Catastrophe Bonds started in the late nineties and are certainly a meaningful market, worth somewhere around $12-13 billion range in terms of outstanding issuance.”

“However, the traditional reinsurance market represents about $200 billion in risk that trades each year compared with the Cat Bond market, making it far larger. There are a number of additional risks in this market, which can also help diversify or complement a portfolio. These can present new opportunities to investors than you would otherwise get from the Cat Bond market.”

Notes to Editors

To obtain a full copy of the Clear Path Analysis report ‘Insurance Linked Securities for Institutional Investors’ and/or speak with one of the commentators please email ClearPathAnalysis@humebrophy.com or call +44 (0)20 3440 5656.

About Clear Path Analysis

Clear Path Analysis is an impartial, independent publisher of high quality reports on pressing industry issues written by a cross-section of experts in the financial services, investments and pensions sector. Clear Path Analysis has a unique position in the market place – because of its model of using majority end users and buyers to contribute high quality papers. Clear Path Analysis, established by Noel Hillmann in January 2010, is headquartered in London and has plans to expand the business into New York, Sydney and Hong Kong over the next two years, substantially growing its headcount. For further information, please visit www.clearpathanalysis.com

Press Contact

Andrew Gates

Hume Brophy

+44 (0)20 3440 5656

clearpathanalysis@humebrophy.com 

[1] http://www.artemis.bm/blog/2012/03/13/akibare-ii-ltd-japan-typhoon-catastrophe-bond-comes-to-market/

New York: Investment groups are increasingly concerned that the next 20 years will bring higher inflation and slower growth rates than the last two decades. As such U.S. and Canadian-based pension schemes have once again been given a reminder of the threats faced by inflation and the need to develop inflation hedging plans quickly. The popularity of more varied portfolios and the use of strategies such as infrastructure are on the up as the market takes the necessary steps to safeguard its investments.

Increasing oil and health care prices, past weakness of the dollar and Asia exporting higher prices to the West are all contributing to inflation. Furthermore, the U.S. Department for Agriculture projects that 2012 will bring an overall food price spike of 2.5 to 3.5%. Inflation-hedging characteristics and global-listed returns equivalent to CPI plus 6.3% over 20 years champion the use of infrastructure assets. Regulation, concession agreements and contracts all link these assets directly to inflation.

The second annual Inflation Hedging for Institutional Investors in North America report by Clear Path Analysis brings together 20 U.S. and Canadian-based pension, endowment and asset management experts, who alongside their institutional investment peers, examine what a heightened inflation environment means, what can be done to limit the damaging effects on portfolios and what the optimal assets are for high or negative inflation scenarios.

Jeremy Lawson, Senior US Economist and Aaron Kohli, Interest Rate Strategist at BNP Paribas Corporate & Investment Banking, note: “The U.S. economy is in an unpredictable position and the Fed faces a serious dilemma; they must devise the perfect degree of monetary stimulus to make progress on their employment mandate without jeopardising their long-term inflation target”.  

They predict that: “Going forward, we expect the Fed will continue to get the policy mix right and a gradual decline in unemployment takes place without a break out in wage growth, while inflation expectations remain anchored close to 2%.”

Lawson and Kohli also make it clear that investors and managers need to have plans prepared for both scenarios: “The market does not reward investors who prepare only for the expected outcome. It is vital to explore both risk scenarios for inflation and the possibility of a steady deflation.”

In an interesting roundtable Yigal Jhirad, Senior Vice President & Portfolio Manager at Cohen & Steers, warns of the global inflation threat: “Natural supply barriers and geopolitical issues are affecting commodities. Inflationary pressures exist and we have seen food, oil and gas prices rise. So our approach is to build a strategy that is well positioned to excel in periods of high inflation, but also offer an attractive risk/return profile over the long term. However, we are not trying to call the market.”

He goes on to explain the intricacies of hedging against inflation: “The drivers of inflation are very complex and they could be monetary, cost or demand induced. In order to try to target inflation as a whole, you really need to think about having a diverse mix of real assets that would be effective in providing purchasing power protection against multiple drivers of inflation.”

Jon Ruff, Lead Portfolio Manager and Director of Research─Real Asset Strategies at AllianceBernstein, offers a similar view: “Most inflation hedges vary significantly in their effectiveness across time and different inflationary episodes. Therefore, to build an effective portfolio of inflation hedges, it’s critical to understand the key drivers of each asset and its fundamental response to changes in inflation.”

Ruff goes on to note: “Our research shows that while many different asset classes could potentially hedge against inflation, their effectiveness varies, as does their reliability. A strategic real asset portfolio should be built upon a well-diversified mix of real assets that optimize the trade-offs between risk, return and inflation sensitivity.”

Press Contact

Andrew Gates

Hume Brophy

+44 (0)20 3440 5656

clearpathanalysis@humebrophy.com 

London: Awareness among institutional investors of Environmental Social and Governance investing (ESG), also referred to as Socially Responsible Investments (SRI), has accelerated over the past 12 months. Data from Clear Path Analysis reveals that 75% of those following SRI principles see value in considerations such as managing reputation and country risk – specifically within frontier markets.

With this increased demand, 82% of fund managers now believe that ESG issues are an important consideration when choosing new investments, however 43% remain unclear about the links between ESG and profits in the short to medium term. This is despite evidence from Allianz Global Investors which indicates that this type of investing can provide returns of up to 1.6% over traditional equities.

Commenting on the growing trend towards ESG investment, Dominic Scriven CEO at Dragon Capital, said: “Rapid economic growth, maturing capital markets, evolving political and regulatory frameworks and youthful demographics have understandably attracted increasing attention from global institutional investors keen to deploy funds in promising frontier markets.”

“In the past, many of these investors have found the lack of corporate transparency, poor governance practices and erratic enforcement of regulation delivered risk too great, and as such have delayed investing until now that is”. In addition: “There has been clear upsurge in corporate SRI awareness as many companies have realised it is an essential requirement to maintain a positive company profile.”

Wolfgang Pinner, Head of Sustainable Investments at Erste Asset Management, writes about increased investor awareness and the benefits of the SRI approach: “Investment managers sometimes believe, wrongly, that ESG investing is merely just another top-down, board driven set of constraints and can offer no intrinsic value to their investment approach. This is simply not the case.”

“This kind of approach is geared to benefit investment portfolios in most asset classes. Adding this new dimension to the investment process can help investors stay clear of risks often neglected by traditional investment styles.” He continues: “Investors long for higher transparency standards and, thanks to its extended view of risk, an SRI investment approach can help to achieve this.”

Pinner adds: “The Fukushima nuclear accident is the most recent example of a situation where a thorough ESG approach could have helped investors avoid risky companies. Furthermore, it would also have helped investors steer clear of Greek bonds due to the poor track record of governance displayed by the Greek Finance Ministry. This kind of responsible approach can help investors and fiduciary managers protect their reputation.”

“Responsible investing is not reserved for an elite of tree hugging philanthropists. It proceeds from a sound investment process, is geared to generate performance and it enhances the opportunities available to investment managers. ESG investing should be regarded as a risk-adjusted alternative to traditional alpha generation. I believe that the flow of money towards SRI funds is not about to stop.”

Notes to Editors

To obtain a full copy of the Clear Path Analysis report ‘Environmental  Social and Governance Investing’ and/or speak with one of the commentators please get in touch.

About Clear Path Analysis

Clear Path Analysis is an impartial, independent publisher of high quality reports on pressing industry issues written by a cross-section of experts in the financial services, investments and pensions sector. Clear Path Analysis has a unique position in the market place – because of its model of using majority end users and buyers to contribute high quality papers. Clear Path Analysis, established by Noel Hillmann in January 2010, is headquartered in London and has plans to expand the business into New York, Sydney and Hong Kong over the next two years, substantially growing its headcount. For further information please visit www.clearpathanalysis.com.

Press Contact

Andrew Gates

Hume Brophy

+44 (0)20 3440 5656

clearpathanalysis@humebrophy.com 

London: A report by leading pension managers, trustees, corporate sponsors and asset managers in the UK, Europe and the US examines how institutional investors should position asset allocation strategies for a high inflation scenario plus the investment strategy that will best protect against growing inflationary pressures.

The emerging markets and commodities boom along with the effects of the economic stimulus packages mean pension schemes and the wider institutional investment sector have found themselves struggling to make sense of inflation expectations.

In a fascinating roundtable Emmanuel van der Mensbrugghe, European Director at the International Monetary Fund; Trevor Williams, Chief Economist at Lloyds TSB Corporate Markets and Member of Shadow Monetary Policy Committee; as well as Thomas Mayer, Chief Economist at Deutsche Bank debated the real trend for inflation in Europe.

Commenting on the macroeconomic environment and inflation outlook over the next 12 months, Thomas Mayer estimates that levels will reach around 3% on food and oil price pressures. “But there’s a more important underlying development which is taking place and that is a long term upward trend in inflation caused by lax monetary policies globally, which will significantly erode the value of low return assets and cash.”

On the subject of a high profile case of lax monetary policy, Emmanuel van der Mensbrugghe, referring to the “massive” fiscal adjustment of 5% that Greece has already made, implies that there may be room to make use of high performing assets in an inflationary environment: “We tend to focus on the liability side but there are also assets in these countries and we take the view that there is scope to utilise some of these assets to enhance their creditworthiness”.

Markus Heider, Global Head of Inflation Research at Deutsche Bank adds: “Among central banks, the ECB believes that inflation risks warrant higher policy rates, while the US Fed remains concerned about high unemployment weighing on inflation and is still completing QE2. But the best example of the divergence in views may be the BoE, with one MPC member arguing for further QE, while three others are advocating an immediate policy tightening.”

Stephen Jones, Co-Head of Fixed Income at Aegon Asset Management explains: “These price pressures look set to continue despite only modest economic recovery and an assumption of a significant amount of spare capacity in the UK economy. Raw material costs, food, energy and tax changes have driven recent inflation events, and while the tax change effects will fall away in 2012, we believe that other price pressures will persist.”

Published today, the Clear Path Analysis report ‘Inflation Hedging for Institutional Investors’ highlights what a heightened inflation environment means and what can be done about it.

Stephen Jones believes that countering this threat (the emergence and persistence of inflation) requires a specific and dedicated investment response. “Our Inflation Linked Fund seeks to deploy a multi asset approach to firstly offset some of the expense seen in the core index-linked asset, and secondly capture price moves at all stages of the price pressure pipeline. Therefore the fund can and does invest in commodities, equities, credit, foreign exchange and interest rates around a core holding of index linked bonds sourced from the UK and overseas government markets. In so doing, we are taking exposure to the causes of inflation as well as assets that benefit from the end result.”

Nicolas Tabardel, Global Head of Inflation Volatility at Deutsche Bank considers whether there will be substantial amounts of volatility in the future: “We’ve become used to low and stable inflation in the last twenty years. If you take a long term historical perspective, that’s an exception. Over the next five to ten years inflation volatility will be much higher, which makes it more important to develop investment strategies to hedge that risk.”

In terms of how the inflation options market has developed and what is driving the demand, he notes: “The growth in volumes has been phenomenal. Last year we had a growth spurt in the market, combined interbank volumes for Europe and the US trebled from $13bn in 2009 to $50bn in 2010. If you look back, in 2004 this market didn’t exist and in 2005 the market traded $1bn. Volumes have been roughly doubling every year on average, so it’s very fast growth.”

On the main trading themes in this market Nicolas Tabardel suggests: “In the UK we have demand for floors from pension schemes but we also have supply of caps, so that’s the only market where caps are available in large size and are cheap. It seems that everybody wants to buy inflation caps, the only place where caps are cheap is the UK but nobody wants to buy them here.”

Explaining the rationale of using inflation options he concludes: “Many of our clients are exposed to inflation risk and inflation volatility risk in one form or another. We see pension funds that have LPI (liability driven investment) liabilities; we see real estate investors receive LPI linked rent and we see bond investors buy TIPS (treasury inflation protected securities) and therefore hold inflation flows. Both of these are good reasons to use inflation options.”

Looking to other protection options, David Donora, Head of Commodities at Threadneedle Investments, remarks that commodities remain an effective strategy: “They have long been recognised as a credible hedge against inflation, especially unexpected inflation. Commodities continue to provide protection against inflation and its destructive effects, particularly as long as emerging markets growth remains robust and developed market governments continue to deploy unorthodox economic policies.

David Donora identifies two drivers behind this trend. “Emerging markets growth is highly commodity-intensive owing to the need to build infrastructure and improve the living standards for nearly half the world’s population, so this demand for commodities appears well entrenched. On the current path, the best case scenario is that there will be a slow, sustained decline in the value of the dollar. With commodity prices denominated in dollars, this means that the price of commodities will continue to climb.

He continues: “Looking forward, while the risk is that we have to contend with a more volatile world, commodities continue to provide a safe haven for capital preservation and remain an effective hedge against inflation.”

William Nicoll, Head of Alternative Structures at M&G Investments believes: “We approach inflation and real estate from a different angle and have for many years sought the closest inflation linkages – one of them is in long-term inflation-linked leases. These are a very attractive way for us to try and get some type of inflation hedging into a portfolio that is linked back to property risk. If you’ve got an underlying tenant who is very high quality then you can start seeing that almost as an inflation-linked bond, rather than property, a type of inflation linked bond with an extra bit of property or credit risk.”

“Another clear opportunity here is in social housing, where you have an explicit RPI linkage to the rents being paid into the housing associations. A bond backed by a housing association and secured on residential property therefore has a direct inflation linkage. You can go from a very low risk idea of social housing bonds to a higher risk idea of inflation linked leases and then on through to the direct property investment itself. It’s simply a question of how long is your time horizon – if it is long enough then libor-linked investments, inflation and property would all tend to work together at some point.”

Jon Masters, Head of Property Derivatives at BGC Partners goes further: “With the uncertain investment environment, high inflation and potential regulatory change it makes sense for pension funds to consider ways to protect investment returns using the latest risk management tools. In the case of property this entails utilising derivatives.”

He continues: “By using a blended RPI / Property Linked Note a pension fund can protect its portfolio against the erosive nature of inflation with no basis risk whilst giving property returns and capital guarantees in a quicker and more effectual way than buying or selling various sector specific assets within that property portfolio.”

From analysis undertaken by BGC he states: “In the case of commercial property investment, rental income vastly improves the performance of commercial real estate returns relative to RPI. Therefore, it is sensible to protect the income element from the erosive nature of inflation… Secondly, the residential sector is a good inflationary hedge and diversifier within a portfolio. Using property derivatives, pension funds can now gain synthetic exposure to the returns of the residential market without any of the traditional tenant / ethical dilemma risk or management burden, associated with ownership of the physical asset.”

Notes to Editors:

To obtain a full copy of the Clear Path Analysis report ‘‘Inflation Hedging for Institutional Investors’ and/or speak with one of the commentators please email ClearPathAnalysis@humebrophy.com or call +44 (0)20 3440 5656.

About Clear Path Analysis:

Clear Path Analysis is an impartial, independent publisher of high quality reports on pressing industry issues written by a cross-section of experts in the financial services, investments and pensions sector. Clear Path Analysis has a unique position in the market place – because of its model of using majority end users and buyers to contribute high quality papers. Clear Path Analysis, established by Noel Hillmann in January 2010, is headquartered in London and has plans to expand the business into New York, Sydney and Hong Kong over the next two years, substantially growing its headcount. For further information, please visit www.clearpathanalysis.com.

Press Contact:

Adam Honeysett-Watts
Hume Brophy
+44 (0)20 3440 5656
adam.honeysett-watts@humebrophy.com

TradeTech, London, 13 April 2011

New York/London/Moscow: OTKRITIE, one of the largest financial groups and leading providers of high frequency trading solutions in Russia, has partnered with Marco Polo Capital Markets (MPCM) to provide clients with an interface to an extensive family of local emerging market and global brokers, as well as the institutional investor community.

MPCM, a leading broker neutral multi-asset class electronic platform, allows global investors to trade in emerging and frontier markets.

The OTKRITIE connection went live at the beginning of March. While OTKRITIE maintains a technology neutral platform and multiple connectivity options, joining the MPCM network makes strong strategic sense given MPCM’s emerging market focus and broad customer base.

OTKRITIE offers the MPCM network a highly effective destination broker in Russia with strong execution capabilities for equities and derivatives quoted on the RTS and MICEX exchanges, as well as for Russian depositary receipts listed on the London Stock Exchange, EDX London and Deutsche Börse. OTKRITIE’s clients will be able to buy and sell single-stock futures or hedge their investments with RTS index and currency futures on FORTS in Russia.

Nils Jahn, OTKRITIE’s Managing Director of Global Electronic Trading, comments:

“Joining the MPCM network gives OTKRITIE access to a global platform reaching over 90 capital markets on which it can distribute its powerful execution capabilities in the broadest array of Russian securities. Our research strengths in Russian corporates support the needs of a fast growing community of institutional investors and traders that play Russia’s equity markets.”

Nigel Roberts, CEO of Marco Polo Europe, adds:

“We are delighted to bring OTKRITIE into the family of Marco Polo destination brokers. We see growing interest within our network in Russian capital markets. OTKRITIE offers powerful capabilities.”

About OTKRITIE Securities Limited

OTKRITIE Securities Limited (OSL) is the UK-based subsidiary of OTKRITIE Financial Corporation (OFC), one of the leading financial services providers in Russia. OFC has acted as a broker, asset manager, financial consultant and investment bank for its clients since 1995.

OTKRITIE is the only major Russian broker offering ‘plug and play’ Direct Market Access (DMA) to the Russian exchanges from a London-based FSA regulated office. OTKRITIE provides execution services to hedge funds, asset managers and broker dealers. Accredited by most European exchanges where Russian instruments are traded, it offers global market connectivity and order-routing from its offices in London, Moscow and Frankfurt.

OTKRITIE provides a full range of brokerage services to international clients, including research and execution. The firm’s practical experience and deep understanding of Russian markets mean OTKRITIE can offer local insight and highly efficient solutions to trade equities, depository receipts and derivatives on MICEX, FORTS, RTS, LSE, Xetra and EDX London. Their prime brokerage services, including custody and asset management, financing and securities lending, issuance and cancellation of depository receipts, clearing & settlements and forex solutions, are offered globally. For further information, please visit www.otkritie.com.

About Marco Polo Capital Markets LLC

Marco Polo Capital Markets Inc. is a leading broker neutral multi-asset class electronic platform for global investors to trade in Emerging and Frontier Markets. With a single connection to MPCM, traders and investors gain electronic access to Otkritie and a network of over 125 local brokers. MPCM brings transactions into compliance with local rules and regulations allowing for seamless and transparent cross-border trades. MPCM’s platform is multidirectional and offers connectivity and routing to local brokers and exchanges in more than 90 markets. Investors are provided with access to more than 90% of the MSCI emerging market index. Among Marco Polo’s institutional shareholders are the New York Stock Exchange and the International Finance Corporation, the private sector arm of the World Bank Group. Marco Polo Securities Inc., a wholly owned subsidiary, is a FINRA registered broker dealer. For further information, please visit www.marcopolonetwork.com.

Press Contact:

Adam Honeysett-Watts
Hume Brophy
adam.honeysett-watts@humebrophy.com
+44 (0)20 3440 5656 - calls will be connected to the mobile