Structured investment vehicle

Financial Weapons of Mass Destruction™ A guide to the tools of our trade. →Go uptown Top Trumps®Financial Weapons of Mass Destruction® SIV “You give me that “Duration-My-Mismatch” crap, you can cram it your ass.” Docs Fund constitutions, prospectuses, commercial paper programmes, IMAs, subscription agreements, redemption gates: documentation galore, though none of it makes a damn of difference when the market won’t roll your paper. 7 Amendability Nope. It’s CP. If you don’t like it, don’t roll it. 0 Collateral Yeah well here’s the problem. Portfolios of mortgages. Secured, collateralised, diversified... and as illiquid as hell. Extra points for looking safer than it was. 8 Transferability Some, in theory, but it is CP. It redeems in a month. Why transfer it? Just let it roll off. 5 Leverage Not levered, as such, but a means of providing leverage. When you most want your money back, fast, you are least likely to get it. 8 Fright-o-meter Before 2007: We have allocated risk to those in the market best placed to bear it. After: ARMAGEDDON. 10 Index: Click ᐅ to expand: FWMD Master Agreements Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

A structured investment vehicle (SIV) is a pool of investment assets that attempts to profit from credit spreads between short-term debt and long-term structured finance products such as asset-backed securities (ABS).

A SIV, administered by a commercial bank or another asset manager such as a hedge fund, will issue asset-backed commercial paper (ABCP) to fund the purchase of these securities.

Structured investment vehicles are sometimes known as conduits.