A Luxembourg-based financial entity tasked with the management of the Firminy Equity Fund, Firminy Capital Sarl also has managed a number of Luxembourg Securitization Funds throughout its history. Funds such as Firminy Capital Sarl deal with the special asset class of securitizations, defined as pools of smaller financial assets brought together to create a new security.
Securitization of assets confers a number of advantages to market participants and the economy as a whole. For financial institutions and banks, securitization represents an ideal way to remove outstanding assets from balance sheets and free up capital for additional loans. Thanks to an increased level of available capital, lenders can also provide lower interest rates, which encourages borrowing and results in overall economic growth.
In the same vein, securitization brings together non-tradeable assets and makes them tradeable as a collective, increasing liquidity and introducing new dynamic assets. In terms of risk management, securitization creates a tiered system of assets based on their inherent risk levels, which investors can evaluate and acquire based on the risk expectations of their portfolios.