The U.S. structured credit market is now approaching pre-crisis asset levels—but with a very different, and largely untested, investor base. Should these developments and the re-emergence of synthetic securitization markets in Europe, concern investors? How can investors overcome the data complexity and enhance a discretionary investment strategy in these markets?

Richard McKinney, managing director, asset-backed strategies, D. E. Shaw
Moderator: Alex Proimos, head of institutional content, Investment Magazine

Key takeaways

  • The US market for structured credit has significant breadth of products and is dominated by institutional investors and mutual funds.
  • Within Europe the banking system has not yet evolved to allow the institutions to move away from holding the risk post origination. Given the weaker capital positions for these banks it seems logical that policy moves will try to pass on this risk through traditional and synthetic securitization.
  • As investors rebalance during this recessionary environment there is a likelihood of assets mispricing in the short run.

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