Financial investments involve an element of risk. For further information, please see the risk warning section.
The team is responsible for originating bespoke transactions across a wide variety of underlying asset classes, and for opening up investment in the new asset classes.
The structured deals are typically more complex than mainstream corporate bonds, with the structuring used to either enhance risk mitigation or alter the cash flow profile to better meet an investor’s requirements. This category can also include niche asset types that may be difficult for most investors to access. Managing over £2.8bn (as of 30 September 2017), we have consistently provided investors with superior risk-adjusted returns.
New regulations for banks have curtailed their appetite to continue providing certain products, providing us with a rich pipeline of potential transactions. The Structured Finance team works closely with colleagues across the firm to evaluate a broad range of derivative, asset-backed and credit-linked opportunities, including:
- Mortgage-backed securities
- Collateralised mortgage obligations
- Collateralised debt obligations
- Asset-backed securities
- Social housing
- Ground rent debt
- Derivative-related transactions (including swap repackagings)
- Leveraged finance
- Government-/Supranational-guaranteed loans
- Aviation financing
- Trade financing
Being part of one of the UK’s largest insurers means we see significant flow and are able to execute large and complex transactions, giving us a first-mover advantage and allowing us to generate significant risk-adjusted returns for our clients.
Head of Structured Finance
- As of 31 December 2017 we have completed over £2.8 billion of structured finance transactions
- We have successfully structured the largest CLO of PFI loans, as well as several portfolios of uncollateralised swap positions
Sample transaction: Export Credit
- An export credit agency (ECA) acts as an intermediary between banks and exporters to facilitate export financing
- Government backed. ECA-guaranteed loans or bonds become a government liability
- No mark-to-market risk if investment is held to maturity
- Loans are for specific commercial transactions
- ECA loans tend to be illiquid with little depth to any secondary market
- The loans have an illiquidity premium over comparable sovereign bonds
|Counterparties||Sovereign / national ECA agencies|
|Investment size||$50 million - $150 million|
|Spreads over comparable government bonds||50 - 100bps|
|Credit rating||Sovereign risk; AAA to AA|
|Cash flow profile||Floating rate|
Changing market dynamics may undermine the relative attractiveness of structured transactions.
Assessing risk implications of multi-layered transactions is challenging.
Certain assets held in the fund could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.
The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested.
Learn more about Alternative Income Solutions
For further information contact your Client Relationship Director or Rachel Green, Client Solutions Manager
+44 (0)20 7809 6809*
*Calls to this number may be recorded for training and monitoring purposes.