Asset Backed Securities A review by Richard Cayne of Meyer International Ltd Bangkok Thailand

When developing portfolios, many people generally look to real estate, stocks, bonds and other safe options for investment opportunities. Oftentimes, however, people are easily misconstruing safe with simple.

There are some structured financing options that might require a little more homework on the part of the investor to fully comprehend, but they are often worth it. Asset-backed securities (also known as ABS) are a prime example.

Sometimes complicated financial instruments are viewed by the average investor as being too sophisticated or institutional”, explains Richard Meyer Cayne of Meyer International in Bangkok, Thailand. “But many people see considerable returns on soundly-vetted asset-backed securities. “But prudently vetted asset-backed securities generate significant returns.”

Asset-Backed Securities are Simple at the Core

Of the ABS that receive the most attention, those that contain underlying debt (such as mortgages, credit card debt, and loans) tend to be most prevalent. But other kinds of ABS are structured around receivables like franchise royalties and commercial leases.

Regardless of the type of ABS, their basic structure remains the same.

The first step is to create an SPV (special-purpose vehicle) to attain the necessary assets, whether they are licensing royalties or credit card debt. The SPV sells ABS, in either the form of equity or debt in said assets, to raise funds to ultimately purchase these assets.

Lastly, the money flow from the aforementioned assets are paid out to the investors on the ABS as determined initially.

The instruments of ABS often circulate around assets that cannot get financing unless they come bundled (think of sub-prime mortgages in 2008). In the event that the originator of the asset goes bankrupt, investors are protected by the SPV’s. Additionally, there are credit risk mitigations, but that is far too complicated to expound upon here.

Wait, did you mention sub-prime mortgages?

Indeed. The 2008 credit crisis was impacted to some degree by ABS, in specific the mortgage-backed securities responsible for bundling sub-prime mortgages, which were essentially loans given to people with less than stellar credit ratings.

Theoretically, the flaw was not in the product itself, it lay in the maintenance and execution.

Ask someone in the know for more info

As we saw back in 2008, there are potential pitfalls that can come with asset-backed securities investments. Most of the problems associated with them, however, were due to a lack of due diligence by the people involved and failed to ask the right questions.

Speaking with a trusted financial advisor like Richard Meyer Cayne, who has decades of experience handling these kinds of investments, is certainly the first step towards making sure your money is invested wisely.

Richard Meyer Cayne

Richard Meyer Cayne of Asia Wealth Group Holdings, the Meyer Group, Meyer Asset Management and Meyer International Ltd has been involved in wealth management planning for decades. Originally born in Montreal Quebec, Canada, he later relocated to Tokyo, Japan for over 15 years and now resides in Bangkok, Thailand. While he runs the Meyer Group and serves as the high credibility CEO of Asia Wealth Group Holdings Ltd, a London, UK Stock Exchange-listed Financial Holdings Company, as well as the Managing Director of the Meyer Group of Companies www.meyerjapan.com. and has additionally been the managing director of multiple organizations that specialize in helping high net worth individuals with succession planning .

Having worked with clients all over the globe with everything from portfolios to bonds to mutual funds to offshore investing to investing in retirement for your golden years, Richard Cayne of Meyer International can help you invest the right way and protect your cash. Richard has been a financial advisor involved in wealth management planning solutions and asset management in Asia for over 25 years and while living in Tokyo, Japan, he assisted many high net-worth Japanese families create innovative international tax and wealth management planning solutions. The financial holding public company of which he is CEO can be seen at Asia Wealth Group Holdings Ltd or the stock exchange link:

https://www.aquis.eu/aquis-stock-exchange/member?securityidaqse=AWLP

Asia Wealth Group Holdings Ltd – Richard Cayne Thailand. Meyer Asset Management Ltd has been in the wealth management space since March 2000 and uses fundamental analysis along with modern portfolio theory.

His image worldwide as a professional advisor has been sterling and he maintains a firm command and understanding of all things finance-related.