The securitization market has evolved since its birth in the 70s, with its latest transformation offering the potential for increased diversification, yield enhancement and downside protection for Multi-Asset-Credit. Now ABF is being taken private by new entrants shaking up the established order to the benefit of semi-liquid portfolios.

Key Takeaways

• While many people may not realize it, the Asset-Backed Finance (ABF) market is part of our daily life and is a critical source of financing for small and medium sized companies.
• As banks have retrenched from the ABF market over the past decade, specialty lenders and private capital have filled the gap with innovative financing solutions.
• Today, the ABF market spans a broad range of sectors and industries that represent a diversified opportunity set in credit and one that is bigger than the US corporate fixed income market.
• An allocation to ABF may provide attractive benefits including portfolio diversification and yield enhancement as well as a possible hedge against inflation.

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