Structured Finance

Structured Finance

Global Structured Finance Market to Reach US$2.6 Trillion by 2030

The global market for Structured Finance estimated at US$1.3 Trillion in the year 2023, is expected to reach US$2.6 Trillion by 2030, growing at a CAGR of 10.2% over the analysis period 2023-2030. Large Enterprises End-Use, one of the segments analyzed in the report, is expected to record a 10.0% CAGR and reach US$1.9 Trillion by the end of the analysis period. Growth in the Small & Medium Enterprises End-Use segment is estimated at 10.9% CAGR over the analysis period.

The U.S. Market is Estimated at US$353.0 Billion While China is Forecast to Grow at 13.9% CAGR

The Structured Finance market in the U.S. is estimated at US$353.0 Billion in the year 2023. China, the world`s second largest economy, is forecast to reach a projected market size of US$541.6 Billion by the year 2030 trailing a CAGR of 13.9% over the analysis period 2023-2030. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at a CAGR of 7.7% and 8.8% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 8.1% CAGR.

Structured Finance - Key Trends and Drivers

Structured finance is a sophisticated financial tool used to manage risk and enhance liquidity by pooling various financial assets and issuing new securities backed by these assets. This process typically involves the creation of complex financial instruments such as mortgage-backed securities (MBS), collateralized debt obligations (CDOs), and asset-backed securities (ABS). These instruments allow originators to convert illiquid assets into liquid capital, providing funding for further investments or operations. By distributing the risk associated with individual assets across a broader pool, structured finance products appeal to a range of investors with different risk appetites. This mechanism not only facilitates capital flow but also supports market stability by offering diversified investment opportunities.

The structuring of financial instruments involves several key participants, including originators, special purpose vehicles (SPVs), credit rating agencies, and investors. Originators, such as banks or mortgage lenders, bundle their financial assets and sell them to SPVs, which are legally distinct entities created solely for this purpose. These SPVs issue new securities to investors, who receive payments derived from the underlying asset pool. Credit rating agencies play a crucial role in assessing the risk of these securities, helping investors make informed decisions. Advances in financial modeling and data analytics have significantly enhanced the ability to structure and evaluate these complex products, making the market more efficient and transparent. Additionally, regulatory frameworks have evolved to oversee structured finance activities, aiming to mitigate systemic risks and protect investors.

The growth in the structured finance market is driven by several factors. The increasing demand for capital by corporations and financial institutions is a primary driver, as structured finance provides a flexible and efficient way to access funding. Technological advancements in data analysis and financial modeling have made it easier to assess and manage the risks associated with structured finance products, enhancing their appeal to a wider range of investors. Regulatory developments aimed at increasing market transparency and stability have also played a significant role, restoring confidence in these instruments post-financial crisis. Furthermore, the globalization of financial markets has expanded the reach of structured finance, with emerging markets increasingly adopting these tools to support economic growth and development. These factors collectively ensure robust growth in the structured finance market, meeting the evolving needs of issuers and investors in a dynamic financial landscape.

Select Competitors (Total 86 Featured) -

• Banco Bilbao Vizcaya Argentaria, S.A
• Barclays Bank PLC
• Barings LLC
• Citigroup, Inc.
• Credit Agricole CIB
• Deutsche Bank AG
• Development Bank of Japan, Inc.
• Goldman Sachs
• HSBC Holdings Plc
• JM Financial Products Limited
• JPMorgan Chase & Co.
• Mercedes-Benz Group AG
• Morgan Stanley
• Societe General SA
• UBS AG

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