Various estimates put the global structured products market at approximately $4 trillion per year. This niche of financial products combines core assets (such as government bonds) with exotic components (like financial derivatives on stock indices). Until now, such products have been mainly dominated by foreign banks, and were accessible to non-accredited (retail) investors only through distributors and banks, who, of course, charged commissions. In practice, these products were essentially inaccessible to most private investors.
This is where Goch Capital comes in, a fintech company that offers a platform of structured products directly to investors – without the need for costly middlemen – and provides a new alternative to traditional investment options in real estate, corporate bonds or equity investments. "We created a bond-based product that can provide high yields, with exposure only if the market has drops significantly," says Tomer Goldstein, founder and CEO of Goch Capital. "Along with the fact that we are an AI company, we are the first structured products issuer in Israel to issue products on stock markets cleared through local Israeli banks."
"The idea is simple," Goldstein continues, "We take a government bond, which is an extremely stable asset, and add an exotic derivative component to it that is not generally accessible to the average investor. By doing so, we aim to generate annual return that can reach double digits, with risk that usually only begins after the stock market falls more than 20%."
Managed Exposure
Goch Capital's flagship product – G-BOND – is built from a combination of four sources of yield: government interest, credit spreads, an exotic stock market derivative, and a unique AI-based hedging algorithm. The result is a single security that sits in the investor's bank account like any regular bond, but with added financial complexity and complex algorithms.
The exotic component is based on a derivative that is activated only if the stock market (for example, the QQQ index) falls more than 20%. "If there is no drop more than 20%, and history shows that in 90% of cases this did not happen, the investor receives the full high interest rate, without any exposure to stocks," explains Goldstein. "Our product is built with a mechanism that protects against sharp declines and graduated exposure."
With G-BOND, investors can avoid being fully exposed to the stock market, except under extreme conditions – and even in those cases, the exposure is partial and managed. "This gives us the opportunity to offer our clients a product that provides returns higher than corporate bonds, but with lower risk than stocks," says Goldstein.
Goch Capital's goal is to make one of the most complicated financial fields accessible, profitable, and simple for the Israeli private investor. Therefore, the most significant news that G-BOND brings is for non-accredited investors, those who generally do not have access to this type of product. Alongside accredited investors who are seeking structured products with high potential returns, without full exposure to the stock market, Goch has adapted its product to retail investors who want alternatives beyond deposits and government bonds – alongside portfolio managers, wealth managers, advisors and independent marketers who need a tool that is flexible, simple to explain, and easy to manage.
Thanks to Goch's new model, a private investor can contact the company directly, purchase the product, and avoid all the unnecessary layers of brokerage and fees along the way. "The model is very simple. You can contact us directly, the product sits in the investor's bank account through the stock exchange clearinghouse, and it appears like any other security," says Goldstein. "There is no need to go through a distributor, there are no high management fees, everything is open, simple and clear." Goldstein also says that Goch Capital constantly adjusts the risk level precisely to the investor's profile, and the algorithms they developed are constantly updated based on real-time market data to make dynamic adjustments.
Linking Worlds
G-BOND's major value proposition is full bank liquidity, so it appears on account statements like any ordinary security. In addition, says Goldstein, the product features full structural transparency, so every component of it can be analyzed and understood, including performance forecasts based on historical simulations.
Another great advantage of the company is in its combination of the worlds of technology and finance. Goch Capital is an AI fintech that integrates knowledge and experience in the areas of artificial intelligence, cyber and investments. The same tools that are used to analyze consumer behavior or AI systems are used to analyze markets and develop advanced financial products.
"First and Foremost – We Are An Israeli Company"
Goch Capital was founded by three Israeli entrepreneurs who bring a rare combination of military, technological and global financial experience. Goldstein, a former F-16 pilot and MBA graduate from the London Business School, served as Vice President at PIMCO London, managing assets worth $22 billion. Raz Chen, a former Duvdevan unit veteran and cyber researcher at Dell, later led the data department at Pagaya, where he developed a multi-billion dollar investment management mechanism using advanced algorithms. They are joined by Ofir Samuelov, an MIT graduate with experience at Barclays Investment Bank and Pagaya, where he developed AI-based underwriting systems. Together, they form a team that understands both risk and finance, as well as the power of technology, and are able to translate this into smart and accurate investment products. Today, the company manages nearly NIS 200 million, and the opportunity to invest is only passed on by word of mouth. "Goch Capital is, first and foremost, an Israeli company," says Goldstein, "so it is important to us that the private market in Israel gets to know us and our product, which can open up opportunities for accredited and non-accredited investors to play on the big-league investment playing field."
Resilience – A Look at Historical Data
As a tech-based company, Goch Capital adheres to data-based operations, future projections and examination of performance over the years.
So what were the actual figures? "According to tests conducted by the company based on historical market data," explains Goldstein, "if the G BOND had existed since 2007, it would have achieved a full return of 10%-12%, in 188 out of 204 months. Even in the few cases where the investor didn't receive the full interest in the first year, the data show that the following year compensated for this with excess return, which indicates smart cyclicality and handling of volatility. We believe that the data paint a picture of a product with built-in protection and high success rates over time."
"Goch Capital brings to the private investment market a product that was until now virtually inaccessible, in an efficient manner, and offers impressive return potential," concludes Goldstein. "Thanks to a combination of government bonds, exotic derivatives and advanced algorithms, our product offers the private investor something new: potential for high returns, managed risk, direct access and no unnecessary fees."
The above does not constitute investment advice, recommendation or an opinion regarding the feasibility of an investment and is no substitute for advice that takes into account individual data and needs. Past performance is not indicative of future performance. Investing involves the risk of partial or complete capital loss.
Partnered with Goch Capital
