Asset-backed securities (ABS) are a type of structured credit instrument where bonds are backed by underlying pools of assets such as mortgages, loans or other corporate or consumer debt. A portfolio of comparable assets are grouped together and held by a Special Purpose Vehicle (SPV). These are then securitised with the bonds backed by the asset portfolio -sold to investors in the market.

A CLO is a type of structured finance product which is backed by a diversified pool of corporate loans. These are typically loans to businesses with sub-investment grade credit ratings. When a CLO is issued, a large number of loans are packaged together, structured into tranches with varying credit ratings and then sold to investors in the market.

With Trump trades flooding the equity market in the run up to the US elections; a sell-off in the treasury markets since then; and Bitcoin hitting an all-time high this month, it is fair to say, that for some investors at least, the last few months have been a bare-knuckle roller-coaster ride.

The environmental failures of water utilities across the UK and the financial failure of Thames Water, has rightly led to increased scrutiny of the entire water sector.

As we pass the halfway mark of 2024, the UK, and European asset-backed securities (ABS) markets continue to demonstrate robust performance and resilience. We review H1 2024 here and expectations for the rest of the year.

Private credit is attracting a lot of attention. A combination of higher base rates, a credit margin and illiquidity premium are appealing to investors looking for income.

Private credit is a relatively new asset class in Australia and has grown considerably in recent years. While the private credit opportunity may be moderating in the US interest among Australian investors may not yet have peaked. Private credit offers a number of benefits to investors, including attractive risk-adjusted returns, an illiquidity premium and diversification out of public markets.

Private securitisation warehouses, the pre-curser to public asset-backed securities, present a compelling opportunity for investors. Offering a substantial yield pickup over public markets due to their illiquidity and complexity, investors can gain attractive risk-adjusted returns and meaningful portfolio diversification benefits from this sub-asset class. Given its complex nature, it is critical to choose a manager with extensive experience in this market to ensure risks are managed appropriately.

London, 26 June 2024 – Fidante the global multi-affiliate investment management business, reveals the key findings of its survey assessing European institutional investor attitudes to allocating to specialist investment management businesses.