Turnover in the securitization market means some industry players, just arriving at the space, may not remember the lessons learned from the financial crisis.
IMN and the SFIG’s ABS Vegas Event in its second year running has over 6,500 industry players in attendance. It’s surely a sign that the market is growing but will the host of new players at the conference understand the lessons learned from the financial crisis?
That is what four self-styled "forefathers" of securitization gathered on stage to discuss today.
Speaking on the panel today were Jason Kravitt, partner at Mayer Brown; Vernon Wright, trustee of the Wright Family Foundation; Sanjeev Handa, managing director at Old Orchard Lane; and George Miller, chief executive officer of Auspex LLC.
The panelists mapped the trajectory of securitization from its early days, when it was known as the darling of the financial markets, to the darker age of securitization post financial crisis.
“The industry has a short memory and with turnover there aren’t many people who remember 2008," said Wright.
In the near term, the panelists said that the rebuilding blocks of the market lie in arming investors and issuers with better, more comprehensive information.
“Issuers need to view investors as partners, not as a dumping ground for assets they are trying to shift,” said Wright.
Handa, who said he is bullish on the industry, believes the market needs to retain the important lesson on how things can go wrong. “Folks today have new tool in regards to analytics to better understand deals,” he added.
He also believes that a new creativity, where structures are tailored to meet issuer and investor need, on a smaller scale will be a way forward. “This was really the hallmark of our industry,” said Handa.
Miller said that securitization will also exist, and in a significant way. “Its asset based financing similar to what the Egyptians were using when they used factoring,” he said. Miller added that if real change is going to happen in securitization it is going to have to come from within the industry and not from regulators.