• Assetization transforms assets or income streams into tradable instruments. Securitization is the mechanism that makes it possible by pooling assets and issuing securities backed by their flows for investors.
• By converting illiquid assets into tradable securities, securitization improves capital allocation in the markets.
• Platforms like FlexFunds facilitate this process by issuing investment vehicles backed by different types of assets.

The pursuit of liquidity, diversification, and exposure to different asset classes has led asset managers to consider assetization in a high-uncertainty environment.

Companies, banks, and asset managers use these structures to monetize assets that were traditionally illiquid.

The transformation of assets into tradable financial instruments has become one of the most visible trends in global capital markets, opening the door to a multibillion-dollar business.

This process, known as assetization, allows assets or income streams to be converted into securities that can be bought and sold among investors through processes such as securitization.

Following the lessons learned from the global financial crisis at the turn of the century, the regulatory framework around these instruments has allowed them to position themselves on the horizon of global asset managers as an alternative. 

“Securitisation markets remain an important tool of the global financial system,” according to a report by the Bank for International Settlements (BIS), headquartered in Basel.

Assetization transforms illiquid assets into tradable financial instruments for investors.

The document, published by specialists from the BIS Financial Stability Institute, notes that securitization allows financial institutions to obtain liquidity, transfer risks, and optimize capital usage. 

In particular, “by converting illiquid assets into marketable securities, traditional securitisation facilitates the efficient allocation of capital, supports financial intermediation and contributes to economic growth.”

The III Annual Report of the Asset Securitization Sector by FlexFunds and Funds Society shows that 80% of investment managers see high potential in securitization, highlighting its capacity not only to convert illiquid assets into tradable instruments but also to diversify risks in today’s context of trade war and tensions in the Middle East.

Despite regulatory challenges, the outlook for securitization is described as highly positive and encouraging, according to the III Annual Report of the Asset Securitization Sector 2025-2026.

The market’s development has given rise to new platforms specialized in structuring these financial instruments.

In particular, FlexFunds positions itself as a partner for global asset managers by facilitating the issuance of securities backed by different types of assets. 

FlexFunds, through its ETPs, facilitates the distribution of investment strategies by enabling agile and efficient access to multiple international private banking channels. 

Notably, FlexFunds’ asset securitization program reduces time and costs, adapting to each manager’s profile. Its solutions include:

The FlexPortfolio, which enables the offering of investment strategies through ETPs as a more efficient alternative to conventional funds. 

Flex Private Program, which gives large clients the ability to manage their own exclusive ETP issuer with greater flexibility and customization. 

And FlexFeeder, which allows the securitization of private fund participations, converting them into listed securities to facilitate global distribution.

Platforms like FlexFunds simplify the issuance of investment vehicles backed by different assets.

A market exceeding US$7 trillion

The growth of the asset-backed securities market (ABS) reflects the expansion within the strategies of global asset managers and investors.

According to estimates from consultancy Precedence Research, the global asset-backed securities (ABS) market reached approximately US$7.30 trillion in 2025, with projections pointing to a potential increase to US$7.71 trillion in 2026.

This growth responds to demand for structured instruments that provide both asset and geographic diversification at a time when obtaining liquidity is a priority, as well as to the pursuit of “efficient capital management among financial institutions,” according to the report. 

The consultancy explains that the growth is also linked to investors’ interest in “fixed-income securities” with relatively stable cash flows.

“Technological developments in securitization platforms, enhanced credit risk assessment models, and regulatory changes are all contributing to increased market confidence and transparency,” states the Precedence Research report.

How assetization works

In practice, issuers use assetization to package different types of assets that generate future cash flows into a financial structure. Those assets are then transformed into securities that can be sold to investors.

Assetization can be applied to a wide variety of assets, FlexFunds explains. Among them are stocks and bonds, commodities, and financial derivatives such as futures or options. In these cases, the value of the instrument is backed by the flows or contracts linked to those assets.

Securitization can even extend to intangible assets such as intellectual property, whose future income can come from royalties or usage rights.

Another frequent category includes loans and financial contracts that generate cash flows serving as backing for investors who acquire the structured securities.

This model allows institutions to free up capital and improve their liquidity. At the same time, investors gain access to instruments backed by specific income streams.

Assetization allows companies and managers to access alternative and diversified financing sources. It facilitates risk transfer and improves credit management in financial balance sheets.

Market evolution

The universe of assets that can be assetized has expanded significantly in recent years due to the rise of digitalization and the evolution of financial market infrastructures.

In general, financial innovation has been an important driver of this market’s growth. As a result, the development of new structures and platforms has reduced barriers to issuing asset-backed securities. This has allowed more investment managers to explore assetization as a financing tool.

The market has seen the entry of real estate portfolios, private fund participations, alternative investment strategies, and infrastructure projects. This evolution has opened the door to new opportunities for investment managers. 

Changes in investment strategy

The growth of asset-backed securities reflects changes in global investment strategies. In a context of volatility and high interest rates, many managers seek instruments with predictable cash flows.

Assetization can also expand access to certain assets that were traditionally reserved for large investors. For example, some alternative strategies or private portfolios might require large investment amounts. By being structured as tradable securities, these assets can be distributed more broadly.

Digitalization has expanded assetization, opening new financing sources and investment access, but demands greater transparency and regulatory rigor.

Challenges for the market

Despite the sector’s growth, assetization also faces challenges worth noting.

One of the main challenges is ensuring transparency about the assets backing each instrument. When instruments combine multiple types of assets, risk analysis becomes more sophisticated and necessary.

For this reason, good structuring and regulatory practices remain fundamental. 

On the regulatory front, the Bank for International Settlements notes that any revision of securitization frameworks must be carried out with caution. It explains that, while reforms can boost competitiveness and growth, it is key to preserve the regulatory objectives established after the global financial crisis.

“Any changes should be pursued through a globally coordinated effort in order to ensure regulatory consistency, minimise the risk of arbitrage, and maintain robust prudential standards and a level playing field among market participants,” it states.

To learn more about FlexFunds’ solutions and how they can help you expand the distribution of your investment strategy and your client base, contact one of our specialists.

Sources: 

• https://flexfunds.com/solutions/asset-securitization-which-assets-can-be-securitized/
• https://www.precedenceresearch.com/asset-backed-securities-market
• https://www.bis.org/fsi/publ/insights71_summary.pdf