The long-term megatrend of European private asset-backed finance

While Europe’s private asset-backed finance markets have been growing in importance for a number of years, it's only in recent years where we've seen the regulatory pressures that banks are facing come to the fore, fuelling a strong desire to shrink balance sheets and increase capital. This has created a wealth of opportunities, with a significant number of transactions coming to market almost every week. Listen to this episode of The Investment Podcast to find out more about why we think the Significant Risk Transfer (SRT) market is poised for significant growth over the coming years – and what’s driving a steady stream of core loan portfolio sales in various jurisdictions.   Speakers:James King, Head of Structured Credit.Jo Tomkins, Investment Specialist – Structured Credit. Host: Romil Patel, Global Managing Editor.   Credit risk: Investments may be exposed to the possibility that a debtor will not meet their repayment obligations.Liquidity risk (closed-ended): Investments may be illiquid, as a result it may be difficult to realise, sell or dispose of an investment at an attractive price or at the appropriate time or in response to changing market conditions.Concentration risk: Due to their limited number, investments may be affected adversely by the unfavourable performance of a single issuer.Derivative risk: The use of derivatives for non-hedging purposes may expose investments to a higher degree of risk and may cause larger than average price fluctuations.Currency risk: Investments may be exposed to currency rate movements.Equity risk: As equity is subordinate to all other claims into an underlying investment, investments may be exposed to the possibility of a low or zero recovery.Prepayment risk: Loans may be prepaid by issuers at short notice, as a result it may be difficult to locate and reinvest capital at an attractive price or at all, which may adversely affect investments.        For Investment Professionals only. Not for onward distribution. No other persons should rely on any information contained within. This guide reflects M&G’s present opinions reflecting current market conditions. They are subject to change without notice and involve a number of assumptions which may not prove valid. The distribution of this guide does not constitute an offer of, or solicitation for, a purchase or sale of any investment product or class of investment products, or to provide discretionary investment management services. These materials are not, and under no circumstances are to be construed as, an advertisement or a public offering of any securities or a solicitation of any offer to buy securities. It has been written for informational and educational purposes only and should not be considered as investment advice, a forecast or guarantee of future results, or as a recommendation of any security, strategy or investment product. Reference in this document to individual companies is included solely for the purpose of illustration and should not be construed as a recommendation to buy or sell the same. Information is derived from proprietary and non-proprietary sources which have not been independently verified for accuracy or completeness. While M&G Investments believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions which may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. All forms of investments carry risks. Such investments may not be suitable for everyone. United States: M&G Investment Management Limited is registered as an investm