Trading and Structuring
Our Trading and Structuring team manages a significant portion of OMLACSA’s funds, including all their non-profit annuity funds and the bulk of their shareholder-guarantee risk.
The team is experienced in:
- Interest rate risk
- Inflation risk
- Optionality
- Derivatives
- Index arbitrage
- Credit management
- Liquidity management
- Cash management
Since assuming management of the OMLACSA funds, OMSFIN has reduced the interest rate volatility and significantly improved the performance and capital efficiency of the funds.
Building on the success of these initiatives, and the experience gained in managing the OMLACSA funds, we assisted OMLACSA in taking this technology to the market.
Our core competencies include:
Greg Mollentz: Head: Equity Derivatives
Equity futures and options form the basis of this business, providing our clients with innovative asset solutions. These solutions include:
- Using exotic options to dynamically hedge complex liability profiles with embedded
options
- Using equity derivatives, in the form of futures and a combination of credit and money market instruments, to generate a return in excess of the benchmark
index return.
Lance Osburn: Head: Asset Liability Management
This strategy is specifically for annuity funds and pensioner liabilities within pension and retirement funds.
The team analyses and hedges the inherent interest rate and inflation risks caused
by mismatches between the liability and the asset’s benchmarks. The appropriate
assets are used to safeguard against the liabilities.
The team then formulates an appropriate strategy tailored to the client’s risk
and return requirements. This includes using a combination of money market instruments, credit and “growth” assets to generate alpha.
Andrew McPherson: Head: Risk Consulting
We identify ways to reduce the risk of capital losses and increase the sustainability
and consistency of earnings for Old Mutual shareholders.
The team can extend this capability to third-party clients. They assess the risks
facing the client and provide independent advice to assist with the development and
implementation of hedging solutions to counter these risks.
Munnik Botha: Head: Quantitative Development
All our products undergo extensive scenario modelling before and after implementation.
Our highly skilled quantitative analysts are equipped with strong analytical
and modelling skills. They are supported by sophisticated systems to manage derivatives,
credit, inflation and interest-rate risk.
Kevin Wood: Head: Money Market Trading
Our money market traders are responsible for the liquidity and cash management of:
- OMSFIN's short-term cash
- The cash component of the various annuity products we manage
- Enhancing the yield on Old Mutual's shareholder cash.
This team’s function also involves lending to banks and funding corporates through
overnight loans.
In addition, our money market desk has access to borrow Old Mutual's bond holdings.
These are used to raise funding in the repo market.
Kevin Wood: Head: Scrip Lending
For the past 10 years we have acted as agent lender for Old Mutual’s portfolios in the South African securities lending market.
We are also a member of the South African Securities Lending Association (“SASLA”).
Our success lies in our ability to reach and engage with all other major reputable participants in the market. We have well-developed expertise, both within the trading environment and with regards to the legal and credit risk aspects of securities lending.