• Securitization enables the conversion of different asset classes into tradable securities with varying risk profiles.
• This mechanism broadens access to capital markets for managers
• Transparency, the quality of the underlying asset, and the regulatory framework are key determinants of the performance of these instruments.
• FlexFunds offers an asset securitization program that optimizes the distribution of investment strategies. For more information,  you can contact our experts.

Managers are turning their attention back to securitization, — the process of converting assets into tradable instruments — as a way to accelerate liquidity and generate returns in 2026, in a context that demands capital rotation and greater financial discipline.

A recent analysis by consulting firm EY describes securitization as transitioning from a specialized financing technique into a mainstream pillar of Europe’s capital markets.

Looking ahead to 2026, “continued reform and market development are set to increase its competitiveness versus alternative funding tools and deepen investor participation”, EY anticipates.

Securitization transforms illiquid assets into tradable instruments, facilitating their efficient integration into the capital markets.

This way, issuers can optimize risk exposure, improve financial indicators, and free up resources without resorting to additional traditional debt. Consider a fund that converts a credit portfolio maturing over five years into bonds backed by those cash flows. The fund can sell that bond on the market and obtain liquidity to invest in new projects. 

This need for liquidity and flexibility applies not only to conventional loans, but also to less liquid assets, such as real estate or private funds. 

The global asset-backed securities market is estimated to have reached US$7.30 trillion in 2025.

Estimates suggest this could rise to US$7.71 trillion by 2026, according to figures from consulting firm Precedence Research. “This market is growing due to rising demand for structured investment and liquidity solutions.”

In this context, FlexFunds emerges as a solution that facilitates asset securitization, enabling the issuance of agile, adaptable investment vehicles with international distribution. 

The goal is to increase liquidity and efficiency while boosting the international distribution of investment strategies. Its platform enables packaging both liquid and illiquid assets into ETPs (Exchange-Traded Products) ready for global distribution.

This directly addresses the market’s need for instruments that generate immediate and accessible liquidity, while also enabling portfolio diversification with alternative assets.

There is also an industry-wide push to reduce issuance costs and timelines compared to conventional vehicles, a need these solutions are addressing. 

What assets can be securitized?

An IDB report defines securitization as the process of pooling cash-flow generating assets and converting them into tradable securities with different levels of risk for investors.

Future cash flows are structured into bonds or shares that can be listed or traded, transforming the asset from a static holding into an active part of the capital markets.

The assets most commonly securitized range from mortgages and loans to consumer credit and accounts receivable. They can also include flows derived from infrastructure, leasing, or recurring commercial revenues.

“With this tool, issuers can better manage their balance sheets and diversify its funding sources, reducing their dependency to banking funding and being able to access capital markets,” explains the IDB. 

By structuring future cash flows into listed securities, issuers can optimize their balance sheet and diversify their funding sources.

For issuers, it is also a vehicle that generally allows them to free up capital and reduce the average cost of funding.

From the perspective of managers specifically, it is a way to structure portfolios with diversification and exposure to real assets without acquiring them directly. 

According to EY, “Securitization can free up bank balance sheets, diversify funding sources and tailor risk return profiles for institutional and, increasingly, semi professional investors”. 

For 2026, EY considers that securitization will continue to grow as a key trend, driving asset-backed financing, integrating into alternative funds, expanding into digital and technological infrastructure, and consolidating green and ESG securitization.

For example, according to EY, “the surge in AI, cloud computing, and data sovereignty is driving securitization of digital infrastructure assets such as data centers and fiber networks. These assets, backed by long-term contracts and predictable cash flows, are increasingly attractive for structured finance solutions.”

 How does the securitization process work?

In the securitization process, an entity pools assets with predictable cash flows and transfers them to a special purpose vehicle. These vehicles then issue the securities backed by those underlying assets.

In the case of FlexFunds, these securities are known as Flex, defined as “an exchange-traded product (in the form of a note) that provides a solution for investment management and distribution.”

The key is not only to package assets, but to design solid, transparent structures aligned with international regulatory standards.

FlexFunds allows the securitization of both liquid and alternative assets, from stocks and bonds to private or real estate funds, creating ETPs tailored to different strategies and investor profiles.

The process begins with an analysis of the assets, risk profile, and client’s objectives, followed by due diligence and agreements that define responsibilities.

The ETP is then structured through an SPV, ISIN or CUSIP codes are generated, and custody and asset valuation services are established.

ETPs are distributed globally via Euroclear, converting assets with predictable cash flows into tradable securities that deliver payments derived from the original flows.

The model offers immediate liquidity, diversification, operational efficiency, rapid implementation of 6 to 8 weeks, competitive costs, transparency, governance, and scalability for portfolios of different sizes.

To learn more about FlexFunds’ ETPs, do not hesitate to contact our executives. We will be glad to assist you!

Sources:

• https://www.ey.com/en_lu/insights/banking-capital-markets/securitization-in-pan-europe-key-drivers-in-2025-and-outlook-for-2026
• https://www.investopedia.com/terms/s/securitization.asp
• https://www.precedenceresearch.com/asset-backed-securities-market
• https://flexfunds.com/faqs/
• https://www.flexfunds.com/solutions/how-to-coordinate-asset-securitization-process-with-flexfunds/