Trade Receivables Securitisations are Riding High, But Why?

Trade Receivables Securitisations are Riding High, But Why?

Published 18th June 2024 by Tom Huntingford in Blogs

Trade receivables securitisations are gaining significant traction, and the reasons are multifaceted. In May, I joined an expert panel at the Global ABS conference in Barcelona, titled “Trade Receivables Securitisations are Riding High, But Why?” to shed light on this evolving landscape. Here are some key insights from the discussion.

Alternative Funder Solutions

The growth in trade receivables securitisations can in part be attributed to the influx of alternative funders such as private credit funds, as well as pension funds and insurance asset management arms. This diversification of funding sources is revolutionising the market, creating more investor demand, more competition and fundamentally broadening funding opportunities.

Significant Increase of Private Credit Funds and Capital

The growth of private credit funds has been particularly noteworthy. The International Monetary Fund (IMF) estimates that by the end of 2023, the assets and committed capital in private credit funds reached a staggering $2.1 trillion. This influx of capital is providing much-needed liquidity to the structured private financing and securitisation market, making it an attractive option for investors and businesses alike.

Capital Dedicated to Asset-Backed Opportunities Increasing

Capital allocation to asset-backed opportunities is on the rise. Apollo, a leading global alternative investment manager, has shown great optimism about this asset class. In a report published in Q4 2023, Apollo highlighted that the market for asset-backed opportunities is valued at approximately $20 trillion. This scale underscores the vast potential and growing importance of private asset-backed securitisations, such as trade receivables securitisations, in the global financial landscape.

Competitive Pricing with Banks

The entry of larger institutional funds and sponsors into the market has also increased the total available capital. Some of this capital is being priced at rates competitive with traditional banks for funding senior tranches of sub-investment-grade (sub-IG) medium-sized corporate programs. This competitive pricing is making trade receivables securitisation an increasingly cost-effective financing solution for a much broader range of companies, getting more liquidity into new parts of the market.

Role of Insurance and Pension Asset Management Teams

While insurance and pension asset management teams are actively participating in the market, they generally lag behind more specialised funds in terms of experience and capability. However, the insurance arms of large sponsors are exceptions, often bringing substantial expertise and resources to the table. Their involvement and lower cost of capital is critical in broadening the investor base and enhancing the market’s overall robustness.

Current Securitisation Players Assisting in the Transition

The current ecosystem of securitisation players is instrumental in facilitating this market transition. A large and diverse network of firms plays a vital role in supporting transactions. Corporate service providers offer essential administrative and operational support, ensuring compliance and efficiency. Law firms bring their legal expertise to navigate the complex regulatory landscape, while auditors provide the necessary financial oversight and assurance. Together, these firms create a robust infrastructure that underpins the securitisation market.


The rise of trade receivables securitisations can be partly attributed to the growing presence of alternative funders, the competitive pricing of capital, and the support of a well-established ecosystem of securitisation players. Private credit funds, with their significant capital and competitive rates, are playing a pivotal role in this market. Meanwhile, insurance and pension funds, although not as experienced, are making notable contributions. At Demica, we work with a range of bank & non-bank investors to find the most suitable funding sources for transactions.

The optimism expressed by industry leaders like Apollo highlights the potential of this asset class. With the continued support of a robust ecosystem, trade receivables securitisations are well-positioned to remain a vital component of the global financial market.

As the market continues to evolve, continuing and deepening collaboration between the various market participants will be key to sustaining its growth.

More on trade receivables securitisation

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Trade Receivables Securitisations are Riding High, But Why?

On demand: Demica Insight Q4 2023: focus on trade receivables securitisation