Elkhorn hires BNP’s Fabrice Hugon to boost structured products business

By Emma Trincal

New York, Sept. 29 – Fabrice Hugon, former managing director, head of equity derivatives sales of BNP Paribas, has joined Elkhorn Securities, LLC, an independent boutique structuring firm based in Wheaton, Ill., according to a company press release.

Hugon, a derivatives specialist, will be in charge in his newly created role at Elkhorn of developing the structured products activity of the firm so far mostly focused on fund-based products, such as exchange-traded funds, unit investment trusts and closed-end funds but also exchange-traded notes.

Hugon will have oversight of sales and product development for Elkhorn's structured products business while Ben Fulton, chief executive officer of Elkhorn, will continue his oversight of UIT, ETF and separately managed accounts sales and product development, according to the press release.

“Our goal is to integrate the structured products and fund-based businesses and to become [a] one-stop shop for clients who want to express a particular idea and use it in the most appropriate investment structure,” Hugon told Prospect News.

Agnostic approach

“We have customized ideas using ETFs, ETNs or funds. Now we want to be able to do the same thing with structured products. We want to use structured notes linked to this idea,” he said.

“We’re planning on launching indexes and to use ETFs or structured notes as wrappers depending on what the client is trying to achieve.

“Our goal is to bring innovation to our clients and leverage the strategies in a product structure that meets the client’s needs.”

Hugon said that his set of skills should complement Fulton’s expertise in this project.

“Ben has been in the fund business for many years. My strength is in derivatives and structured products,” he said.

Fulton founded Elkhorn in 2013. He has 30 years of financial services experience, especially in the ETF industry, according to the firm’s website.

Elkhorn “designs, sponsors and distributes innovative, research-based products,” the press release said.

While at BNP Paribas, Hugon was a member of the global equity and commodity derivatives’ executive committee for the Americas in New York. He led the structuring and trading of BNP Paribas’ first hedge fund-linked structured product in the United States, the launch of the bank’s market-linked certificates of deposit and the deployment of SMART derivatives in the United States, the bank’s structured equity products platform.

Prior to joining BNP Paribas, Hugon worked in the alternative investment structured group of Societe Generale in New York.

“Fabrice is a recognized leader in the structured product industry and at BNP Paribas,” Fulton said in the press release, adding that he has worked with him and BNP Paribas “extensively” while forming Elkhorn.

Convergence

By bringing on board a structured products and derivatives specialist, Elkhorn wants to bridge the gap between funds and structured products, explained Hugon, a concept often called “convergence” in the industry.

“We want to be able to bring the research to the client and to repackage the idea into a particular wrapper regardless of what the wrapper is, whether a note, an ETF, a UIT, a closed-end fund, a mutual fund or a structured note,” Hugon said in the interview.

“We want to be agnostic about the wrapper.”

The need to value the research first and to design the most appropriate instrument next – which is Elkhorn’s business model – is also part of a growing industry trend, he said.

“Clients have an idea and need us to package it in the best investment structure. We will design the investment based on what fits the client’s needs best,” he said.

“We think there is a gap right now. Banks are in the business to push structured notes. Asset managers are in the business to push funds. There is nobody in between that can be a link. And that’s what we want to be. We want to be that link.”

Asked whether Elkhorn will be hiring other professionals soon, Hugon said it will depend on the level of growth achieved by the firm.

“Elkhorn is a start-up. We have 14 people working with Ben. Most of them come from the large ETF shops,” he said.

“We have a total of 10 marketers. They have a dual expertise in funds and structured notes. There would be no point in segregating our team between structured products and fund-based business. If we did that, we would be recreating the gap that we are trying to close.

“As the firm grows over time, we will be looking to hire more talent. But at this time, we can’t tell exactly when.”

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