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More evidence of interest-rate swaps demand

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UK - Further evidence of the growth in the interest-rate swap market - boosted at least in part by pension fund demand - came today with figures from brokerage firm ICAP.

ICAP said in its first-half earnings report that its European profits were boosted by interest-rate swaps trading.

The Bank of International Settlement said last week that activity in the sector had surged in the first six months - with observers pinning demand on pension funds.

ICAP reported "strong growth in the interest rate derivative business" - although the rest of its rates products "experienced tougher conditions".

Pre-tax profit in the European business rose to £53.6m (€79.4m) from £40.2m in the same period last year.

"In a low yield environment we expect banks and hedge funds to increase their commitment of capital to structured products," ICAP stated.

"We expect our markets to continue to be active, assisted by growth in credit products particularly structured credit, continuing growth in algorithmic trading and the growth of commodities as an asset class."

The company disclosed that the interest-rate group saw revenues of £232.6m - 43% of total revenues.

The group reported a total profit of £120.8m, a 23% increase over last year.

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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