The choice between a Special Purpose Vehicle (SPV) and a regulated fund is one of the most important structural decisions for asset managers. Each framework offers different benefits depending on the strategy, asset types, and investor base.
SPVs provide bankruptcy remoteness through ring-fenced compartments. Each compartment is legally separate, assets and liabilities in one compartment cannot be used to satisfy claims in another. This structural protection is a cornerstone of the securitisation framework.
Compartmentalisation allows multiple products to be issued from a single SPV platform, each with its own ISIN, fee structure, and underlying assets. This makes SPVs highly efficient for asset managers with multiple product lines.
Cost efficiency is a major advantage of SPVs. Unlike regulated funds, SPVs do not require a fund management licence, depositary, or ongoing regulatory approval for portfolio changes. The leaner operational structure translates into lower fixed costs.
Institutional acceptance of SPV-issued securities has grown significantly. Major private banks, custody providers, and institutional investors routinely accept SPV-issued AMCs, CLNs, and ETPs as bankable instruments.
Regulated funds remain the appropriate choice for retail distribution, particularly within the EU where UCITS passporting provides access to millions of retail investors. For professional-only distribution, SPVs offer comparable credibility with greater operational flexibility.
This article is for informational purposes only and is intended for professional investors. It does not constitute legal, tax, financial or investment advice, nor an offer of any security.