Securitization becomes attractive again for banks

Summary of the article in French:

• The securitization market is experiencing a resurgence, with Zurich-based startup GenTwo leading the way. Banks, faced with diversification in client portfolios, are seeking to regain control over alternative investments that have largely eluded them.

• After being viewed with caution since the 2008 financial crisis, securitization is making a comeback. GenTwo, a specialist in "next-generation" digitalized securitization, recorded an additional volume of 1.1 billion Swiss francs in issued securities in 2022, along with a 50% increase in clients.

• Today, securitized assets are backed 100% by segregated assets, and the securitization market is better regulated compared to the pre-2009 era. Technology provides additional support with double checks and improved qualification of investors and projects.

• The types of assets being securitized have shifted significantly. While structured products were primarily securitized before the crisis, 60% of GenTwo's activities now involve alternative investments such as private equity, venture capital, peer-to-peer lending, and pre-IPO investments. Additionally, collectibles (art, cars, boats, wine) and digital assets account for 12 to 15% of securitized value.

• The shift towards securitization is driven by changes in portfolio allocation following the 2008 crisis. With bonds no longer yielding significant returns, investors diversified their portfolios. As a result, 20% to 30% of high-net-worth individuals' wealth consists of "non-bankable" assets, totaling $78 trillion worldwide. Securitization provides a way for banks to tap into this market.
   

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