BNP Paribas intends to provide a variety of derivative products linked to the S&P Hedge Fund Index that could include principal protected notes, swaps and options that will be available to investors worldwide. BNP Paribas expects products and liquidity to be available by early 2003.
Stéphane Liot, Global Head of Fund Derivatives at BNP Paribas said, "The S&P Hedge Fund Index provides us with an innovative asset on which to base derivative products that will add a new dimension to the S&P Hedge Fund Index products created by PlusFunds." He added, "The pricing characteristics possessed by S&P Hedge Fund Index should enable us to provide daily liquidity under normal conditions, which is unprecedented for any hedge fund product. In addition, the daily transparency offered by the index provides us, and in turn our clients, with the ability to track better what drives hedge fund returns and identify the risks in investing in this alternative asset class."
Steven Oyer, Vice President, Standard & Poor's, said. "One of Standard & Poor's objectives in creating the S&P Hedge Fund Index was to provide an index that could form the basis for a number of investable products that would offer investors exposure to the hedge fund universe. We are delighted with the interest we have received worldwide for licences and products based on the index and we think products like BNP Paribas' will offer opportunities for increased institutional and retail involvement in the hedge fund marketplace."
Notes to editors:
BNP Paribas is an international financial services group, with solid roots in Europe, leading positions in Asia and an active presence in the United States. It is the first bank in terms of net income and market capitalisation in the eurozone. BNP Paribas has one of the largest international banking networks, present in 86 countries with 85,000 employees, including 65,000 in Europe. The group has three core businesses: Corporate and Investment Banking; Private Banking, Asset Management, Securities Services and Insurance; Retail Banking.
About the Standard & Poor's Hedge Fund Index
The S&P Hedge Fund Index, introduced in May 2002 and launched in mid-November, is designed to be both investable and representative of the broad-based investment experience of the hedge fund marketplace. It comprises nine distinct hedge fund investment strategies grouped into three broad style categories -- Arbitrage, Event-Driven and Directional/Tactical. There are 40 institutional quality managers that currently comprise the S&P Hedge Fund Index. In order to guarantee investability of the index, Standard & Poor's requires each of the constituent managers to set aside $100,000,000 in investment capacity for Index related assets. Its values are calculated and published daily by Standard & Poor's on its website www.spglobal.com. Index values are also available on Bloomberg tickers: SPHG (Main Index), SPHGARB (Arbitrage sub-index), SPHGEVT (Event Driven sub-index), SPHGDIR (Directional/Tactical sub-index). More information about the structure, design and components of the S&P Hedge Fund Index can be found on www.spglobal.com