In
investment banking
Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...
, a structurer
[Joris Luyendijk (2012)]
Interview: Head of Structuring equity-derivatives
''theguardian.com''
is the
finance professional responsible for designing
structured product
A structured product, also known as a market-linked investment, is a pre-packaged structured finance investment strategy based on a single Security (finance), security, a basket of securities, Option (finance), options, Index (economics), indices, ...
s.
Their solution will typically deliver a bespoke
hedge
A hedge or hedgerow is a line of closely spaced shrubs and sometimes trees, planted and trained to form a barrier or to mark the boundary of an area, such as between neighbouring properties. Hedges that are used to separate a road from adjoini ...
,
"yield enhancement", or other feature,
as appropriate to the client's needs, and must inhere relevant regulatory and accounting considerations;
see .
The role is usually quantitative, straddling that of
sales and trading Sales and trading is one of the primary front-office divisions of major investment banks. The term is typically reserved for the trading activities done by sell-side investment banks who are primarily engaged in making markets for institutional clie ...
and
front-office quantitative analyst.
The structurer's main
analytic task is to determine how the
pay rules in question will distribute
cash flow
A cash flow is a real or virtual movement of money:
*a cash flow in its narrow sense is a payment (in a currency), especially from one central bank account to another; the term 'cash flow' is mostly used to describe payments that are expected ...
s for a deal;
to do so, they will typically
build computer models to
simulate these subsequent payments, thereby also estimating how
collateral payments affect the cash flows.
The above is preliminary to
deal settlement; thereafter it will be in the hands of the
Bond administration to apply the rules as described in the deal
legal document
Legal instrument is a law, legal term of art that is used for any formally executed written document that can be formally attributed to its author, records and formally expresses a legally enforceable act, process, or contractual duty, obligation ...
s.
References
Finance occupations
Financial analysts
Investment banking
Structured finance
{{Econ-stub