Step by step: How is the asset securitization process?

News & Insights - March 25, 2022

Asset securitization is one of the most frequently used methods of creating investment vehicles (ETPs) designed by financial advisors. Experts select a series of securities, indices, commodities, stocks, or other types of assets and securitize them through a provider such as FlexFunds. This company takes care of the entire process to create unique and innovative ETPs within reach of fund managers. Thus, thanks to these ETPs, asset managers, and financial advisors can expand the range of products to offer to their clients.

How is the asset securitization process?

FlexFunds’ asset securitization program makes setup ETPs simple for its customers, allowing them to select a variety of assets, including fund accounting and back-office services, corporate administration services, and product launch coordination. Your ETP is to be ready in 6 to 8 weeks, when it could take a minimum of 4 months through the traditional route. Thus, once the process has finished, the advisor can market this product in which it has repackaged several assets into a single investment vehicle.

FlexFunds is a service provider that offers solutions that support the securitization of assets; in just five simple steps, you will launch your ETP to the market, facilitating access to investors in the global capital market.

  1. Design the investment strategy of your ETP.
  2. Sign the Engagement Letter
  3. Due Diligence
  4. Investment vehicle Setup
  5. Issuance of your ETP

Asset securitization makes a series of assets more accessible and internationalized to reach other investors. It is a straightforward way for an investment advisor, for example, to expand to international markets with the creation of the ETP and provide greater access to investors.

Example of asset securitization

A company in the real estate sector has the business objective of reaching a more significant number of investors. To this end, it decides to put together in a portfolio a series of assets: residential or office buildings and decides to set up an ETP. Thanks to this vehicle, it will break down borders by improving the distribution of the investment strategy on the various international private banking platforms.

What assets can be securitized?

  • Liquid assets: stocks, bonds, ETFs, mutual funds, options, futures, and Forex.
  • Alternative assets: private investment funds, real estate investment funds, hedge funds, and private loans.

Thanks to FlexFunds’ solutions, you can access investment vehicles that securitize different types of assets, such as liquid, alternative, or listed assets, at the custodian of your choice.

FlexFunds coordinates the securitization program, a fast, efficient, and compliant process to make the ETP available to the client in the market and reach a more significant number of investors.

In addition, the positive aspect of having an expert such as FlexFunds is that it has more than ten years of experience in the asset securitization process with more than 250 issuances and more than 200 clients worldwide. It is a guarantee that gives clients the peace of mind that the ETP they want to develop meets all the requirements to reach a more significant number of investors.

What solutions does FlexFunds offer for asset securitization?

FlexFunds is a leading provider of investment vehicle setup solutions that support the securitization of assets, improve investment strategies’ distribution, and facilitate access to international investors. FlexFunds’ solutions include:

  • FlexPortfolio: unregulated ETP that securitizes listed liquid assets, such as stocks, bonds, options, Forex, futures, ETFs.
  • FlexFeeder unregulated investment vehicles that securitizes alternative assets and fund shares, such as private equity, real estate investment trusts, or hedge funds.
  • Flex Private Program: Provides large customers with the administration of their bespoke issuer of ETPs, allowing for increased flexibility and customization.

The time to market of these ETPs is between 6 and 8 weeks, a much shorter time than the rest of the available alternatives. FlexFunds’ ETPs will allow you to have a single ISIN code distributable through Euroclear.

If you want to know more about the asset securitization process and how you can benefit from it, don’t hesitate to contact our team.