A financial professional with over three decades of experience, Seth Koppes is the founder and CEO of Bancorp Services. Under Seth Koppes’ direction, the company assists large financial institutions and Fortune 500 organizations by developing innovative structured financial products.
Structured finance describes sophisticated financial instruments that are typically used by large companies to raise capital. Contrary to traditional securities like stocks and bonds, structured finance products are non-transferable securities. Investors don’t acquire an ownership interest in companies when they buy these products.
Investors earn passive income from the proceeds generated by the underlying assets in structured finance products. For investors, this is a new source of income and also an opportunity to gain exposure to the underlying assets. A process called securitization can help reduce the risk associated with holding these products by bundling diverse assets into a single product.
For large companies, structured finance is a cost-effective and efficient way to create a financial market for raising capital. Through the market, investors transfer funds to the company in exchange for securities that are backed by assets. Structured finance products can also be customized to the specific needs and financial goals of issuers, which include corporations, financial intermediaries, and governments.
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