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Asset securitization, an innovative financial strategy, plays a crucial role in the global financial system, especially in the robust capital markets of Europe and the United States.
This process transforms a diverse set of assets into tradable securities, thereby facilitating access to financing. Securitization is the funding of a set of assets through the issuance of securities and originated in the 1970s with the purpose of financing mortgage loans. Securitization has grown exponentially, diversifying its reach to encompass assets such as accounts receivable, corporate debt, equity interests, commodities, and even tangible assets like artwork, critical infrastructure, and real estate properties.
Over the decades, these securitization transactions have not only increased in complexity and sophistication, but have also taken on an indispensable role in optimizing liquidity and investment risk, offering investors a wide range of financial instruments. The ability to convert illiquid assets into liquid securities, and the opportunity to diversify portfolios, make securitization a powerful tool for investors and companies seeking to maximize their financial resources and expand their economic horizons.
The financial products structured through our SPVs represent an advanced and flexible investment offering, providing multiple issuance options that remain off the general balance sheet, thereby ensuring asset segregation. MTCM, as an investment vehicle manager, provides products with ISIN codes, ensuring their compatibility and accessibility, as well as their free transferability. This allows their placement among a broad spectrum of institutional and private investors.
These financial products packaged in an SPV, including both actively managed certificates and global note programs (asset-backed securities), are notable for their ability to be listed on the stock exchange at the investor’s request, increasing their market attractiveness and liquidity. MTCM offers the flexibility to choose from various prestigious jurisdictions – including Luxembourg, Liechtenstein, Ireland, and Guernsey – for the structuring of the investment vehicle, thus adapting to the specific preferences and regulatory requirements of each client.
Our product team configures a tailored compartment within our SPVs, designed to provide agile and efficient solutions, allowing the issuance of an investment vehicle in the short term and the issuance of the financial product. This places MTCM’s SPV securitization products in an advantageous position compared to other alternative investment structures, which are often subject to stricter regulatory regimes such as AIFMD or conventional investment funds, thus offering a simpler and more accessible distribution to meet the demands of the most demanding investors.
Private loans can be securitised into any type of bonds, including convertibles. This is a highly efficient way to access institutional fixed-income investors worldwide.
The securitised private equity investment becomes a bankable asset. This is a highly efficient way to access global capital markets as the issued EMTNs are provided with an ISIN and traded through global clearance and settlement platforms, such as Euroclear.
Securitization of real estate converts the asset into a tradable security on the financial markets. This is a flexible and efficient way to raise capital, to fund a real estate development project or to get the real estate portfolio of balance sheet.
BABS, Broker Account Backed Security, formerly and erroneously known as AMCs (Actively Managed Certificates), enjoy great versatility in the financial market, allowing the conversion of various values and structured products into tradable instruments. Even a trading account can be securitized, giving investors the ability to design trading strategies with segregated risks and off the accounting balance sheet. BABS, Broker Account Backed Security, can be efficiently distributed among networks of qualified investors, expanding investment options and portfolio management.
Securitization of Cryptocurrencies and Tokens: This innovative trend involves transforming digital assets like cryptocurrencies into regulated, tradable securities. It aims to integrate these assets into the traditional financial system, offering a structured, compliant investment avenue, attracting institutional investors, and enhancing liquidity by making them accessible on conventional exchanges.
The securitisation of fund shares provides a bridge between the fund and the investor, allowing fund managers to sell to institutional investors through a new channel of broker dealers and private banks.
Art has become increasingly popular as an asset class in the post-financial-crisis investment landscape. Investment opportunities in art, collection items or intellectual property (IP) such as brand royalties, music or film rights are typically illiquid and difficult to access.
Institutional investors can securitize their investment strategy or assets into an EMTN and apply for green bond certification in collaboration with Sustainalytics.
Islamic finance products are asset based or asset backed. As such, an asset-backed security or securitization vehicle seems to be the natural fit for structuring Islamic finance transactions. However, Islamic finance does not allow for investments in interest- bearing (“riba”) products, speculation, or investments in certain activities. Furthermore, the security issued may not be interest bearing, but rather must be based on a participation of business risk.
MTCM has a global approach with offices in major financial centers across the globe. Our interdisciplinary teams with a wide expertise will help you design and implement your strategies and provide you with full access to global institutional markets.
MTCM operates under the Luxembourg securitization legal framework, amongst others.
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