Hi all,
LexiFi’s Campaign Management tool offers a comprehensive solution for managing complex financial campaigns. From tracking pre-hedging strategies to managing custodian commissions, the tool provides transparency, organization, and real-time insights into every aspect of a campaign. For brokers and financial institutions, this is crucial in ensuring that the campaign runs smoothly, with every detail meticulously tracked, contributing to more efficient operations and better risk management.
How does a campaign work?
A campaign typically refers to a coordinated effort by an issuer, often working with brokers or financial institutions, to promote and sell a particular financial product or security. This process often involves a combination of marketing, roadshows, and book-building activities to generate interest and gather commitments from potential investors. A campaign is commonly used in the context of new product issuance.
When issuers want to issue a new financial product - whether it’s a bond, a structured product, or a derivative - they may launch a campaign to create awareness and attract investors. This can happen when a product is expected to meet market demand, based on current financial trends or specific investor interest.
The campaign typically includes a book-building and subscription period, which can last for days or weeks (sometimes up to a month), during which the issuer collects indications of interest from institutional and retail investors. Investors commit to buying a portion of the issuance at a certain price or within a price range. The book-building phase is critical as it helps determine the final pricing of the security based on investor demand.
During the campaign, the issuer and their financial intermediaries will allocate the product to investors who participated in the book-building process. The allocation is often based on the size of their commitment, the pricing range they’re comfortable with, and the overall demand.
For certain structured products or derivatives, the issuer (or brokers) may engage in pre-hedging activities to mitigate market risks associated with the product issuance.
After the subscription is closed and the book-building is finalized, the campaign enters the settlement phase. Investors make their payments, and the product is delivered. The product is now officially launched, and the issuer can start managing the obligations tied to it.
LexiFi’s Campaign Management Tool
The LexiFi Campaign Management tool plays a key role in organizing and managing the lifecycle of financial product issuance campaigns:
✔ Overall Campaign Summary
The summary view of the campaign includes key figures such as the subscribed amount, dispatched amount, average tranche price, and profit and loss (P&L) metrics.
💡The overall summary provides a comprehensive snapshot of how the campaign is performing, allowing for easy and real-time monitoring of the campaign’s progress and profitability.
✔ Pre-Hedging Tranches
As previously mentioned, in some cases, the issuer (or brokers) may engage in pre-hedging activities to mitigate market risks associated with the product issuance. “Pre-hedged tranches” are broken down by price, amount, and trade date. This transparency helps brokers track the effectiveness of their pre-hedging strategy and manage risks associated with fluctuating market conditions.
💡LexiFi allows a clear, organized display of each pre-hedge tranche, which simplifies tracking and provides clarity on how pre-hedging is aligned with the broader campaign’s objectives.
✔ Campaign Trades
The “Campaign trades” section contains an overview of the actual trades related to the campaign. Each trade includes details such as:
- Custodian: shows which financial institution is handling the custody of the trades.
- Trade and Settlement dates: The dates when trades were executed and settled. This is essential for tracking trade progress and ensuring the correct settlement process.
- Amount and Price: The amounts traded and their corresponding prices.
💡LexiFi allows to easily track and manage all trades within a campaign, ensuring that each trade is accurately recorded and aligned with the overall strategy. This makes it easier to ensure that allocations are properly executed and that there is no discrepancy between expected and actual trade execution.
Trades of the campaign can be managed like any other trades in the system regarding workflow, reporting and all other processes.
✔ Custodian Commissions
The “Custodian commissions” section highlights the fees that custodians charge for handling trades. Each custodian’s commission rate is clearly visible, along with the traded amounts and corresponding rates.
💡This feature enables precise tracking of commission costs, which can influence the overall profitability of the campaign.
✔ Distributor Split
The “Distributor Split” section handles the distribution of the P&L from the dispatched amount among intermediaries and across sales teams.
💡By clearly defining the P&L allocation among all involved parties, LexiFi’s campaign management tool promotes transparency and ensures accurate compensation, reducing potential miscommunication and financial inconsistencies across distribution channels.
Conclusion
By providing an integrated platform that centralizes all campaign elements - pre-hedges, trades, commissions, and overall campaign performance - LexiFi significantly enhances the management of complex campaigns with greater accuracy and efficiency.
Rather than offering a standalone campaign solution, LexiFi seamlessly integrates this comprehensive campaign module into its robust structured products and derivatives platform. This integration ensures that once a campaign concludes, users can effortlessly transition back to their core business operations while fully leveraging the additional features and functionalities available within the Apropos framework.
| What we're reading |  |
Latest Blog Article: Importance Sampling | |
| Latest client stories |  |
QUINTET PRIVATE BANK: Fabrice Todeschini, Group Head of Global Structured Solutions, explains the success of the collaboration between Quintet Private Bank and LexiFi. SILEX: Alexis de Bernis, Chief Technology Officer at Silex, speaks about Silex’s main achievements with LexiFi Apropos, and more |
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| Features in focus |  |
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