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Celebrating 30 years in derivatives

Click on the dates below to discover derivatives solutions designed by Societe Generale over the years to serve its clients

30 Years of innovative solutions in Derivatives for our clients

  • First Derivatives with Forex

    In 1986, Societe Generale created a team of 5 dedicated to Options within its foreign exchange & treasury department, with FRF 10 billion in assets.
    Translating expertise into solutions for our clients :
    Answering requests from corporate clients, small local businesses as well as major exporters, Societe Generale proposed innovative products to mitigate their currency risks. These new risk management solutions proved to be efficient tools to accompany companies in their investments and growth strategies.

  • First Commodities Derivatives

    In 1987, Societe Generale started to propose & execute derivatives trades on precious metals. The offer started with gold and grew to include agricultural commodities and then energy from 1989.

    Translating expertise into solutions for our clients :
    Commodity derivatives are used by commodities producers, users and investors to manage their business & financial risks. Producers want to manage their exposure to changes in the prices they receive for their commodities. On the other end, commodity end-users use commodity derivatives to hedge or insure their consumption, or working inventories against the effects of fluctuating prices.

  • First Warrants in Europe

    Societe Generale was involved from the earliest days of the warrants business, launching its first warrant on Paris-based communications company Alcatel in October 1989.

    Translating expertise into solutions for our clients :
    Warrants are intended for investment & hedging purposes. Legally treated as securities, they are listed on regulated markets and easily accessible to institutional & retail clients. Upon purchase, the client pays a premium which is usually well below the underlying asset price. Therefore, warrants allow clients to take an exposure to an underlying asset (a stock, an index, a commodity…) at a lower cost compared to a direct investment in the asset class.

  • First Capital Guaranteed Fund

    In 1991, Societe Generale launched its first capital-protected funds. Franvalor, a 100% capital-protected fund linked to the performance of France’s Cac 40 stock index was sold through the bank retail network.

    Translating expertise into solutions for our clients :
    These funds allowed all investors to take advantage of stock market upturns without risking their capital.

  • Correlation Products

    In 1995, Societe Generale was among the first banks to propose products linked to multiple underlying securities from a given asset class, providing investors with new investment solutions that take the correlation factor into account.

    Translating expertise into solutions for our clients :
    Correlation between two securities measures the degree to which these securities move in relation to each other. An exposure to highly correlated securities has to be supervised carefully. Being able to manage such risks has offered our clients the ability to design derivative-based products linked on their own selection of securities and not only linked to a single stock or index.

  • Creation of Lyxor & Managed Accounts platform

    In 1998, Societe Generale created Lyxor Asset Management, an Asset Manager which offers customized investment management services. The same year, Lyxor launched its first Managed Account Alternative.

    Translating expertise into solutions for our clients :
    A managed account is owned by an individual investor but managed by a third party. Adapted to its needs, managed accounts allow investors to benefit from reduced management fees, a dynamic allocation, more frequent valuations, improved liquidity and increased transparency & risk management.


     

    First Everest products

    In 1998, Societe Generale launched its first “Everest” Structured notes. An “Everest” product typically combines a capital protection and the opportunity to receive a predefined bonus that is adjusted according to the performance of the least performing asset within a predefined basket of assets. The Everest structure may also be structured to pay coupons over its life.

    Translating expertise into solutions for our clients:
    Everest protected notes proved very successful in the late 90s in an environment of high volatility and bullish equity markets. They allowed investors to extract value from equity markets without risking their capital: even in a bearish scenario Everest products would still keep the potential to perform.

     

  • First Exchange Traded Funds

    In 2001, Lyxor launched its first Exchange Traded Fund (ETF) in the Paris Stock Exchange.

    Translating expertise into solutions for our clients :
    ETFs are funds that replicate the performance of a stock market index or a basket of products. With a single ETF, investors have access to all components of the related index or basket.
    Their easy functioning, transparency, low management fees and liquidity make them very useful for optimized portfolio management. Societe Generale was pioneer in marketing these products starting with 3 assets classes: stocks, bonds and commodities.

  • Standby Equity Facility or PACEO

    In 2002, Societe Generale designed an equity financing solution named PACEO
    (Capital Increase by Options Exercise), bringing a new financing alternative to
    clients.

    Translating expertise into solutions for our clients :
    Standby Equity Facilities help companies diversify their funding sources. An equity line may be drawn at the client’s sole discretion via the issue of new shares at a discounted price compared to market levels. This provides the same benefits as a capital increase while giving the same guarantee as a confirmed credit line. Societe Generale is the leading institution for equity lines in France since their inception.

  • Bond Inflation Index Trackers

    Building on its success in the trackers market on indices & equities, Lyxor launched in 2004 the first bond tracker in the Paris Stock Exchange and formed a partnership with EuroMTS Limited to provide an easy access to rates markets. While the market saw an increase in bond issues indexed to inflation, Lyxor decided to propose Inflation Index Trackers.

    Translating expertise into solutions for our clients :
    ETFs Bond & Inflation linked trackers allow clients to get through a single tool, an instant & accurate exposure to baskets of bonds or indices indexed to inflation. They constitute a great innovation to protect portfolios from inflation effects.

  • Acquisition of Bank of America’s Structured Investments business

    In 2005, Societe Generale acquired the Fund of Hedge Fund financing business of Bank of America, providing financing solutions to institutional investors that were invested in hedge funds.

    Translating expertise into solutions for our clients :
    The acquisition was a milestone in the development of Societe Generale’s cross asset financing platform in the US, and has allowed it to grow into one of today’s leading players in the US.

  • Contingent Hedge for M&A transactions

    In 2006, Societe Generale started to propose contingent hedging solutions dedicated to clients contemplating strategic transactions such as merger or acquisition abroad.
    Translating expertise into solutions for our clients :
    Currency management has taken a greater importance for companies as more transactions are executed internationally.For a purchase or sale of assets abroad, a bond, or a project financing, treasury departments increasingly consider Contingent hedges. These are triggered by the occurrence of a contingent event (transaction closing). Hence, if the closing does not happen before the end of a “contingency period”, the hedge is terminated at no cost. On the contrary, if the closing occurs during the contingency period, the hedge becomes effective. Simply put, contingent hedges help corporates lock financial conditions and mitigate their risk for strategic transactions and avoid them important costs if the deal does not close.

  • Proprietary Indices

    Societe Generale launched the Societe Generale Index (SGI) platform in 2007 giving access to indices created as early as 2005.

    Translating expertise into solutions for our clients :
    SGI offers a range of proprietary indices developed by the bank which are calculated and maintained by third-party calculation agents, such as Standard and Poor's, Dow Jones, etc.
    They offer both tailor-made index solutions according to specific client guidelines: "custom indices", and solutions that provide an access to certain assets or strategic market segments.The SGI range of indices matches the specific needs of clients; offering them more flexibility, improving pricing conditions and providing an adequate trade-off between liquidity and performance.
    Indices have evolved to give access to increasingly more specific investment strategies, providing access to hard-to-reach markets or growth niches such as alternative energy or sustainable investments.

  • Top player of the Variable Annuity Market in Japan

    In the early 2010s, Societe Generale has become a top player in the variable annuities field in Japan, providing local insurers with innovative solutions from both an investment and a risk management point of view.

    Translating expertise into solutions for our clients :
    Variable annuities are long-term investments primarily designed for retirement and offered by insurance companies. They allow retail clients to expose their assets to a selection of investments while benefiting from actuarial benefits (e.g. guaranteed income, death benefits). Since it qualifies as an insurance contract, any investment earnings are tax deferred.
    Societe Generale’s ability to design customized products and to manage complex financial risks has proven popular amongst Japanese insurers which look for ways to generate enough return to meet their member obligations while carefully managing their risks.

  • Non-Dilutive Convertible bonds in Germany

    In 2014, Societe Generale helped a German corporate issue its first non-dilutive convertible bonds allowing the company to raise €500m without diluting its existing shareholders.

    Translating expertise into solutions for our clients :
    A convertible bond is a debt security issued by a company which can be converted into shares of the company during the bond's life. They represent a flexible financing option for corporates, allowing companies to optimize their borrowing costs. However, convertible bond issues comes with potential dilution of the firm’s capital in case investors ask for conversion of the instrument.Societe Generale was a forerunner in Europe in proposing non-dilutive convertible bond combining a convertible bond with a separate concurrent hedge whereby the company purchases from Societe Generale mirroring options on its own shares to remove entirely the potential dilution.

  • Acquisition of Newedge

    In 2015, Societe Generale acquired Credit Agricole’s 50% shareholding in Newedge, incorporating the expertise & agility of the world-class derivatives broker Newedge.

    Translating expertise into solutions for our clients:
    With the combination of SG CIB activities and Newedge’s execution & clearing services in listed (futures) and OTC derivatives, clients benefit from a fully integrated market activities offering, including prime brokerage, agency and direct execution, research and tailored investment solutions.



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