Month of derivatives at Societe Generale
As a recognized global leader in derivatives, Societe Generale is organizing a series of derivatives conferences for institutional investors in major financial hubs: London, Tokyo and New York.
In London, this year’s Societe Generale-Risk Conference was presented, on October 4th, to a room full of investors that represent €28 trillion of assets under management, “twice the €15 trillion of negative yielding government bonds held by money managers”, according to Jean-François Grégoire, head of global markets at Societe Generale.
“For more than three decades, Societe Generale has been at the forefront of derivatives markets and products, bringing solutions in investment, financing, hedging, as well as developing performance and generating alpha as a hedge against market moves or more general uncertainty. The innovative strategies that we can build with derivatives are even more relevant [in today’s sedated markets],” said Jean-François Grégoire in his opening remarks at the London conference.
The amount of negative-yielding government bonds in the world is “mind-boggling”. Volatility is structurally low, yield is compressed, regulators are continuing to put pressure on both the buy- and sellside, as well as Brexit and trade wars – all impacting on markets.
Using the words of Societe Generale’s ‘permabear’ global strategist Albert Edwards, Jean-François Grégoire noted: “We are definitively in the ice age of financial markets. To address these challenges, we think derivatives solutions are relevant and the right tool to help overcome these difficulties and generate alpha.”
Duncan Wood, global editorial director at Risk.net, added: “Traditional bond portfolio managers can chase yield by travelling down the credit yield curve at the cost of increased default risk. They can play around with term structure, which obviously requires longer durations and increases rate sensitivities to maintain their returns. Or they can transition to alternative, less liquid structures.”
The event in London presented a mix of panel discussion with industry experts on topics such as: Generating alpha in a high “vol of vol” world: what are the roles of systematic and carry strategies? and Japanification of Europe: enhancing returns in a low yield environment. Participants were also invited to attend deep-dive derivative solutions workshops. Click here to view the conference’s full agenda.
Derivatives are the heart of our strategy to build the future of market activities, being always more relevant, innovative and efficient for clients and the search for yield.