Institutional investors target structured finance despite regulation worries

Written by Adam Cadle

27/02/2024

Global institutional investors are expected to rapidly increase allocations to structured finance and securitisations over the next two years despite concerns about regulation in the sector, new research from Ocorian has shown.

Increased innovation was cited as the main reason behind the increased allocations, the research found. Almost all (94%) questioned said allocations will rise with nearly half (48%) forecasting a rise of between 25% and 75% over the next two years.

Around 90% questioned agreed that there is a need to improve regulation with 44% strongly agreeing with the need for enhanced regulation.

Christoph Schwarz, business development director at Ocorian, said: "Regulation is expected to improve but institutional investors need to be careful and selective with allocations to the sector and work with expert partners who can provide the necessary support.”

Ocorian commissioned independent research company PureProfile to conduct a global study of 301 senior executives. The survey was carried out among board directors at companies with annual turnover of more than $250 million, fund managers working in family offices, private equity, venture capital and real estate; and senior executives working in capital markets focused on structured credit, CLOs, securitisation, mortgage-backed securities and asset-backed securities. Respondents to the survey, which was conducted in November 2023, were based in the UK, continental Europe, Asia, the Middle East and North America and included 50 senior capital markets executives.

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