Las Vegas - The structured investment vehicle (SIV) market came up with several major developments in 2006, including two repeat sponsors that launched new vehicles, and a new type of sponsor, likely the Canadian Teacher's Fund. In the year ahead, expect to see U.S. pension funds take a closer look at participating in the sector, while some managers examine new possibilities for underlying assets, including structured finance paper, said industry professionals at the ASF 2007 in Las Vegas last week.
Raising the essential capital portion of SIVs is not the straightforward process that it was in the past, and many new SIVs introduced tranched capital pieces to their vehicles in 2006, Sean McCarthy, a vice president at Lehman Brothers who moderated the morning session, said. Furthermore, the SIV market has traditionally been the province of European sponsors. For nearly the last two years, however, more U.S. managers have been participating in the sector, as the increased availability of tranched capital has intensified interest among potential U.S. managers, sponsors and investors.