Structured credit
The Investment Podcast: The long-term megatrend of European private asset-backed finance
15 min listen 25 Mar 24
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While Europe’s private asset-backed finance markets have been growing in importance for a number of years, it's only in recent years where we've seen the regulatory pressures that banks are facing come to the fore, fuelling a strong desire to shrink balance sheets and increase capital.
This has created a wealth of opportunities, with a significant number of transactions coming to market almost every week. Listen to this episode of The Investment Podcast to find out more about why we think the Significant Risk Transfer (SRT) market is poised for significant growth over the coming years – and what’s driving a steady stream of core loan portfolio sales in various jurisdictions.
Speakers:
James King, Head of Structured Credit
Jo Tomkins, Investment Specialist – Structured Credit
Host:
Romil Patel, Global Managing Editor
Credit risk: Investments may be exposed to the possibility that a debtor will not meet their repayment obligations.
Liquidity risk (closed-ended): Investments may be illiquid, as a result it may be difficult to realise, sell or dispose of an investment at an attractive price or at the appropriate time or in response to changing market conditions.
Concentration risk: Due to their limited number, investments may be affected adversely by the unfavourable performance of a single issuer.
Derivative risk: The use of derivatives for non-hedging purposes may expose investments to a higher degree of risk and may cause larger than average price fluctuations.
Currency risk: Investments may be exposed to currency rate movements.
Equity risk: As equity is subordinate to all other claims into an underlying investment, investments may be exposed to the possibility of a low or zero recovery.
Prepayment risk: Loans may be prepaid by issuers at short notice, as a result it may be difficult to locate and reinvest capital at an attractive price or at all, which may adversely affect investments.
The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested. Past performance is not a guide to future performance. The views expressed in this document should not be taken as a recommendation, advice or forecast.
