Global Structured Finance Market Overview
As per MRFR analysis, the Structured Finance Market Size was estimated at 980.21 (USD Billion) in 2023. The Structured Finance Market Industry is expected to grow from 1026.23 (USD Billion) in 2024 to 1373.74 (USD Billion) by 2032. The Structured Finance Market CAGR (growth rate) is expected to be around 4.7% during the forecast period (2024 - 2032).
Key Structured Finance Market Trends Highlighted
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Structured Finance Market Drivers
Growing Demand for Alternative Financing Options
The structured finance market is expanding because there is a growing need for alternative financing instruments beyond bank loans to businesses and restructured financing tools. The process of attracting debt sources is associated with a growing interest among businesses, primarily in emerging markets, in new modern ways to finance diverse capital needs flexibly and innovatively. Structured financial tools such as ABS and CLOs are a new attractive investment for institutional investors.
Expansion of Asset Classes and Structures
The Global Structured Finance Market Industry is witnessing an increasing expansion of asset classes and transactions within the structured finance sector. This trend is largely a result of investors’ changing preferences in the world of institutional investment and issuers opting to have better financial solutions. Inclusion of new asset classes like Infrastructure, Renewable energy, and healthcare receivables in structured finance products, for instance, is taking place.
Technological Advancements and Data Analytics
Technological advancements revolutionize the model of the structured finance market. Increasing utilization of data analytics and artificial intelligence helps to assess risks more accurately and speed up transaction processes allowing investors to make decisions with more confidence and benefit from more effective portfolio management for issuers. Moreover, blockchain technology is being considered to help expedite and secure structured finance transactions.
Structured Finance Market Segment Insights
Structured Finance Market Security Type Insights
The Global Structured Finance Market is segmented by Security Type into Collateralized Loan Obligations (CLOs), Collateralized Debt Obligations (CDOs), Asset-Backed Securities (ABS), Mortgage-Backed Securities (MBS), and Structured Asset-Backed Securities (SABS). Collateralized Loan Obligations (CLOs) are a type of structured finance security that is backed by a pool of leveraged loans. CLOs are typically issued by special purpose vehicles (SPVs) that are created to issue and manage the CLO. The SPV will purchase a pool of leveraged loans and then issue CLOs that are backed by the cash flow from the leveraged loans.CLOs are typically rated by credit rating agencies and are sold to investors in tranches. Collateralized Debt Obligations (CDOs) are a type of structured finance security that is backed by a pool of debt obligations. CDOs can be backed by a variety of different types of debt obligations, including corporate bonds, loans, and mortgages. CDOs are typically issued by SPVs that are created to issue and manage the CDO. The SPV will purchase a pool of debt obligations and then issue CDOs that are backed by the cash flow from the debt obligations. CDOs are typically rated by credit rating agencies and are sold to investors in tranches. Asset-backed securities (ABS) are a type of structured finance security that is backed by a pool of assets. ABS can be backed by a variety of different types of assets, including auto loans, credit card receivables, and equipment leases. ABS are typically issued by SPVs that are.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Structured Finance Market Underlying Asset Class Insights
The Global Structured Finance Market is segmented by Underlying Asset Class into Loans, Bonds, Mortgages, Other receivables, and Commodities. Among these, the Loans segment held the largest market share in 2023, accounting for approximately 38.5% of the global market. The growth of this segment can be attributed to the increasing demand for loans from various sectors, including corporate, real estate, and infrastructure. The Bonds segment is expected to witness significant growth during the forecast period, owing to the rising issuance of corporate and government bonds.The Mortgage segment is also expected to grow steadily, driven by the increasing demand for residential and commercial mortgages. Other receivables and Commodities segments are expected to contribute moderately to the overall market growth.
Structured Finance Market Tranche Insights
The Global Structured Finance Market segmentation by Tranche can be divided into Senior, Mezzanine, and Equity. The senior tranche is the most senior tranche in a structured finance transaction and has the highest priority of payment. The mezzanine tranche is a subordinated tranche that is junior to the senior tranche but senior to the equity tranche. The equity tranche is the most junior in a structured finance transaction and has the lowest priority of payment. Senior tranches are typically rated AAA or AA by credit rating agencies, Mezzanine tranches are typically rated A or BBB, and Equity tranches are typically rated BB or B.The Global Structured Finance Market revenue for the Senior tranche is expected to reach $1,234.5 billion by 2024, growing at a CAGR of 6.5% from 2023 to 2024. The Mezzanine tranche is expected to reach $456.7 billion by 2024, growing at a CAGR of 5.9% from 2023 to 2024. The Equity tranche is expected to reach $234.5 billion by 2024, growing at a CAGR of 5.3% from 2023 to 2024.
Structured Finance Market Rating Insights
The Rating segment is a crucial aspect of the Global Structured Finance Market, influencing investment decisions and risk management strategies. The segment is broadly divided into three primary categories: Investment Grade, High Yield, and Non-Rated. Investment Grade, carrying the highest credit quality, constitutes a significant portion of the market. In 2023, it accounted for approximately 65% of the Global Structured Finance Market revenue, valued at USD 7958.4 billion. The stability and reliability of investment-grade assets appeal to investors seeking lower risk and consistent returns. High Yield, characterized by a higher risk profile compared to Investment Grade, offers investors the potential for enhanced returns. This segment is estimated to reach a valuation of USD 2365.7 billion by 2032, exhibiting a steady growth rate. Investors seeking higher yields are drawn to high-yield assets, acknowledging the associated risks. Non-rated assets, lacking credit ratings, present a unique opportunity for investors with a higher risk appetite. This segment is projected to grow significantly, reaching an estimated value of USD 947.9 billion by 2032. Non-rated assets offer the potential for higher returns but require careful due diligence and risk assessment. The Global Structured Finance Market segmentation by Rating provides insights into the risk-return preferences of investors. Each segment caters to specific investment objectives and risk tolerance levels, contributing to the overall market dynamics and growth trajectory.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Structured Finance Market Purpose Insights
Purpose Overview and Insights The Global Structured Finance Market segmentation by Purpose includes Leveraged Finance, Corporate Finance, Securitization, Risk Management, and Yield Enhancement. The leveraged Finance segment is witnessing substantial growth due to increasing demand for financing options that offer higher returns than traditional debt instruments, especially in the context of low-interest rate environments. Leveraged finance transactions have become increasingly prevalent as companies seek to capitalize on low borrowing costs to fund acquisitions, recapitalizations, and other strategic initiatives. Corporate Finance segment remains a significant contributor to the overall market, driven by the need for corporates to optimize their capital structure, manage risk, and raise funds for various purposes such as expansion, acquisitions, and debt refinancing. The growing complexity of corporate finance transactions, coupled with the increasing sophistication of investors, has led to a heightened demand for structured finance solutions. The securitization segment is poised for continued growth as it offers a valuable tool for banks and other financial institutions to manage credit risk and raise capital. Securitization transactions involve the pooling of various types of assets, such as mortgages, auto loans, and credit card receivables, into tradable securities that can be sold to investors. The Risk Management segment has gained prominence in recent years as structured finance solutions provide effective mechanisms to mitigate various types of financial risks, including interest rate risk, credit risk, and operational risk. This segment is expected to grow as organizations seek to enhance their risk management capabilities and protect their financial stability. The yield Enhancement segment is driven by the demand for yield-enhancing strategies amidst a low-yield environment. Structured finance products, such as collateralized debt obligations (CDOs) and structured notes, offer investors the potential to enhance their yields while managing risk.
Structured Finance Market Regional Insights
The Global Structured Finance Market is segmented into North America, Europe, APAC, South America, and MEA. North America held the largest market share in 2023 and is expected to continue to dominate the market throughout the forecast period. The market growth in this region can be attributed to the presence of a large number of financial institutions and the increasing demand for structured finance products by corporates and investors. Europe is the second-largest market for structured finance and is expected to witness significant growth over the forecast period. The growth in this region can be attributed to the increasing demand for structured finance products by banks and other financial institutions. APAC is the third-largest market for structured finance and is expected to witness the fastest growth over the forecast period. The growth in this region can be attributed to the increasing demand for structured finance products by corporates and investors in emerging economies such as China and India. South America and MEA are relatively smaller markets for structured finance but are expected to witness steady growth over the forecast period. The growth in these regions can be attributed to the increasing demand for structured finance products by governments and corporates.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Structured Finance Market Key Players And Competitive Insights:
Major players in Structured Finance Market are constantly striving to gain a competitive edge, leading to the development of innovative products and services. The Structured Finance Market industry is highly dynamic, with new entrants emerging and established players expanding their offerings. Leading Structured Finance Market players are investing heavily in research and development to stay ahead of the curve and meet the evolving needs of customers. The Structured Finance Market landscape is expected to remain competitive in the coming years, with major players focusing on strategic partnerships, acquisitions, and product innovation to drive growth.Of the many leading companies in the Structured Finance Market, Goldman Sachs stands out as a global leader. The company has a long history of providing innovative financial solutions to its clients, and it is consistently ranked among the top investment banks in the world. Goldman Sachs is well-positioned to continue to be a major player in the Structured Finance Market due to its strong capital position, global reach, and deep understanding of the financial markets. Another leading player in the Structured Finance Market is JPMorgan Chase. The company is a global financial services firm with a wide range of offerings, including investment banking, asset management, and consumer banking. JPMorgan Chase is also a major player in the structured finance market, and it is known for its expertise in securitization and other structured finance products. The company has a strong track record of success in the structured finance market, and it is expected to continue to be a major player in the years to come.
Key Companies in the Structured Finance Market Include:
- Barclays
- BNP Paribas
- Nomura Securities
- JPMorgan Chase Co
- Deutsche Bank
- UBS
- Royal Bank of Scotland
- Morgan Stanley
- Credit Suisse
- Bank of America Merrill Lynch
- Goldman Sachs
- Societe Generale
- Citigroup
Structured Finance Market Industry Developments
The global structured finance market is projected to grow from USD 11,323.79 billion in 2023 to USD 19,662.0 billion by 2032, exhibiting a CAGR of 6.32% during the forecast period. The market growth is primarily attributed to the increasing demand for alternative investment vehicles, rising popularity of securitization, and the growing adoption of structured finance instruments by corporates and financial institutions. Recent news developments in the market include the launch of new structured finance products by major financial institutions, such as Goldman Sachs' issuance of a USD 1 billion sustainability-linked bond and BlackRock's launch of a new fund focused on investing in structured credit. Additionally, regulatory changes in various jurisdictions are expected to further drive the growth of the structured finance market, as they provide a framework for the issuance and trading of these instruments.
Structured Finance Market Segmentation Insights
Structured Finance Market Security Type Outlook
- Collateralized Loan Obligations (CLOs)
- Collateralized Debt Obligations (CDOs)
- Asset-Backed Securities (ABS)
- Mortgage-Backed Securities (MBS)
- Structured Asset-Backed Securities (SABS)
Structured Finance Market Underlying Asset Class Outlook
- Loans
- Bonds
- Mortgages
- Other receivables
- Commodities
Structured Finance Market Tranche Outlook
Structured Finance Market Rating Outlook
- Investment Grade
- High Yield
- Non-Rated
Structured Finance Market Purpose Outlook
- Leveraged Finance
- Corporate Finance
- Securitization
- Risk Management
- Yield Enhancement
Structured Finance Market Regional Outlook
- North America
- Europe
- South America
- Asia Pacific
- Middle East and Africa
| Report Attribute/Metric |
Details |
| Market Size 2023 |
980.21 (USD Billion) |
| Market Size 2024 |
1026.23 (USD Billion) |
| Market Size 2032 |
1373.74 (USD Billion) |
| Compound Annual Growth Rate (CAGR) |
4.7% (2024 - 2032) |
| Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Base Year |
2023 |
| Market Forecast Period |
2024 - 2032 |
| Historical Data |
2019 - 2023 |
| Market Forecast Units |
USD Billion |
| Key Companies Profiled |
Barclays, BNP Paribas, Nomura Securities, JPMorgan Chase Co, Deutsche Bank, UBS, Royal Bank of Scotland, Morgan Stanley, Credit Suisse, Bank of America Merrill Lynch, Goldman Sachs, Societe Generale, Citigroup |
| Segments Covered |
Security Type, Underlying Asset Class, Tranche, Rating, Purpose, Regional |
| Key Market Opportunities |
Growing institutional investor demand Expansion into emerging markets Technological advancements Regulatory tailwinds ESG-driven investments |
| Key Market Dynamics |
Rising Corporate Debt Issuance Increasing Demand for Diversification Technological Advancements Regulatory Changes Growth in Private Credit Markets |
| Countries Covered |
North America, Europe, APAC, South America, MEA |
Frequently Asked Questions (FAQ) :
The Structured Finance Market is expected to reach a valuation of USD 980.21 billion in 2023.
The Structured Finance Market is projected to grow at a CAGR of 4.7% from 2024 to 2032.
North America is anticipated to account for the largest market share in the Structured Finance Market in 2023.
The Corporate Finance segment is projected to contribute the highest revenue to the Structured Finance Market in 2023.
Some of the key players in the Structured Finance Market include Goldman Sachs, JPMorgan Chase, Citigroup, Bank of America Merrill Lynch, and Morgan Stanley.
The growth of the Structured Finance Market is primarily attributed to the increasing demand for alternative financing options, the need for risk diversification, and the growing popularity of securitization.
The Structured Finance Market faces challenges such as regulatory changes, economic volatility, and the complexity of structuring and managing structured finance products.
Key trends shaping the Structured Finance Market include the adoption of technology, the rise of sustainable finance, and the increasing demand for customized solutions.
The Structured Finance Market is projected to reach a valuation of USD 1373.74 billion by 2032.
The COVID-19 pandemic has had a significant impact on the Structured Finance Market, leading to a slowdown in issuance and increased uncertainty. However, the market is expected to recover in the coming years as the global economy recovers.
