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What is Securitization?
Asset securitization is a transformative financial strategy that plays a pivotal role in the global financial system, particularly within the advanced capital markets of Europe and the United States. This innovative process involves converting a diverse array of assets into tradable securities, thereby enhancing access to capital and liquidity for businesses and investors alike.
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Originating in the 1970s to finance mortgage loans, securitization has evolved significantly over the decades. Initially focused on residential mortgages, it has since expanded to include a broad spectrum of asset classes. Today, securitization encompasses accounts receivable, corporate debt, equity interests, commodities, and tangible assets such as art, infrastructure, and real estate properties.
The growth of securitization has brought about increased complexity and sophistication in financial transactions, positioning it as a cornerstone of modern financial markets. By transforming illiquid assets into liquid securities, securitization not only facilitates the flow of capital but also provides investors with a wide range of structured financial instruments. This process allows for the optimization of liquidity and investment risk, offering enhanced opportunities for portfolio diversification and financial management.
Securitization offers significant benefits for both investors and companies. For investors, it provides access to diverse asset classes and the potential for tailored investment products that meet specific risk and return profiles. For companies, it serves as a strategic tool to unlock the value of assets, improve balance sheet efficiency, and expand financing options.
In essence, asset securitization is more than just a financial technique; it is a vital mechanism for maximizing financial resources, optimizing investment strategies, and supporting economic growth. Its ability to convert a broad range of assets into marketable securities underscores its importance in the global financial landscape, making it an essential tool for navigating the complexities of today’s capital markets.
SPV for Securitization.
The financial products structured through our Special Purpose Vehicles (SPVs) offer a sophisticated and flexible investment solution, providing multiple issuance options that remain off the general balance sheet. This approach ensures asset segregation, enhancing financial management and transparency.
MTCM, as an investment vehicle manager, delivers products equipped with ISIN codes, ensuring their compatibility with international financial markets and facilitating their free transferability. This feature broadens the scope for placement among a diverse range of institutional and private investors, optimizing the reach and appeal of our financial solutions.
Our SPVs encompass a variety of financial products, including actively managed certificates and global note programs (asset-backed securities), which can be listed on stock exchanges upon investor request. This listing capability not only increases the market attractiveness of these products but also enhances their liquidity, providing investors with greater flexibility and exit options.
MTCM offers the flexibility to structure investment vehicles in various prestigious jurisdictions, such as Luxembourg, Liechtenstein, Ireland, and Guernsey. This adaptability allows us to meet the specific preferences and regulatory requirements of each client, ensuring compliance with local and international standards.
Our dedicated product team configures tailored compartments within our SPVs, designed to deliver agile and efficient solutions. This capability enables the issuance of investment vehicles and financial products in a short timeframe, positioning MTCM’s SPV securitization products favorably compared to other alternative investment structures. Unlike conventional investment funds or those subject to stricter regulatory regimes such as AIFMD, our solutions offer a simpler and more accessible distribution model, addressing the needs of even the most demanding investors.
In summary, the advanced structuring of our SPVs provides a robust framework for innovative financial products, enhancing market reach, liquidity, and regulatory flexibility. MTCM’s expertise in managing these vehicles ensures that our clients benefit from cutting-edge solutions tailored to the evolving demands of the global investment landscape.
Securitization Strategies:
Private Debt
Private loans can be securitized into a variety of bonds, including convertibles, offering flexible and efficient financing solutions.
Securitizing private debt allows businesses to unlock liquidity and access institutional fixed-income investors globally. By transforming private loans into tradable securities, companies can diversify their funding sources and improve financial flexibility, attracting long-term investors seeking stable returns.
Our expertise in private debt securitization ensures tailored solutions that meet both your liquidity needs and regulatory requirements. Whether converting a single loan or a portfolio, we structure securitization strategies that optimize the value of your private debt assets, providing seamless access to global capital markets and institutional investors.
Private Equity
Securitizing private equity investments transforms them into bankable assets, providing an efficient pathway to global capital markets. Through the issuance of EMTNs (Euro Medium Term Notes) with an ISIN, these assets become tradable on international platforms such as Euroclear, offering greater liquidity and broader investor access.
Our expertise in private equity securitization ensures a seamless process from structuring to issuance. By turning private equity into tradeable securities, we help you tap into global capital markets, enhancing liquidity and offering efficient solutions for raising capital.
Real Estate
Securitizing real estate transforms the asset into a tradable security, offering a flexible and efficient way to raise capital. This process allows you to fund real estate development projects or move assets off the balance sheet, unlocking liquidity and enhancing financial flexibility.
Our expertise in real estate securitization provides tailored solutions to convert your property assets into marketable securities. Whether financing a new project or optimizing your portfolio, we help you access global capital markets efficiently and seamlessly.
Broker Account Backed Security (BABS)
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.
Digital Assets
Securitizing cryptocurrencies and tokens converts digital assets into regulated, tradable securities, bridging the gap between crypto and the traditional financial system. This approach provides a compliant investment pathway, attracting institutional investors and increasing liquidity by making these assets available on conventional exchanges.
Our expertise in cryptocurrency securitization offers tailored solutions to transform digital assets into structured, tradable instruments, ensuring regulatory compliance while opening doors to global capital markets.
Fund Shares (Feeder Funds)
Securitizing fund shares creates a bridge between funds and investors, enabling fund managers to reach institutional investors through new channels, such as broker-dealers and private banks. This approach offers an efficient way to diversify funding sources and attract a broader investor base.
Our expertise in fund share securitization helps you tap into global markets by converting fund shares into tradable securities, expanding your reach to institutional investors and enhancing capital-raising opportunities
Art, IP and Other Tangible and Intangible Assets
Art has gained popularity as an asset class in the post-financial-crisis investment landscape. However, investments in art, collectibles, or intellectual property (IP) like brand royalties, music, or film rights are typically illiquid and challenging to access.
Our expertise in structuring investment opportunities for illiquid assets such as art or IP allows you to unlock value, offering innovative solutions that make these assets more accessible and attractive to investors.
Green Bonds
Islamic Finance
Islamic finance products are asset-based or asset-backed, making securitization a natural fit for structuring these transactions. However, Islamic finance prohibits investments in interest-bearing (“riba”) products, speculation, and certain industries. Securities issued must be based on participation in business risk, not on interest.
Our expertise in Islamic finance securitization ensures compliance with Shariah principles, offering tailored solutions that align with Islamic investment standards while providing structured financial products.
