Moderator Russell Evans opened the discussion on the topic ‘Subscription Line Credit Securitisations: An Underutilised Tool With Untapped Potential?’ by remarking that while such transactions “do happen”, they are often conducted “behind closed doors” with limited market transparency.
Yesterday’s panel at the Fund Finance Securitisation Forum – Managing Liquidity & Risk 2026, organised by Funds Europe in partnership with Alfi, aimed to “unlock” a greater understanding of how these structures operate and why interest in them is increasing.
Stuart McIntosh, managing director, head of subscription finance Emea, SMBC Group, said that the market has evolved significantly over recent years. He noted that it wasn’t that long ago when there wasn’t much activity in the space, whereas now there is a meaningful volume of transactions and broader market engagement. In his view, softer fundraising conditions and tighter balance sheet constraints are pushing banks to innovate and expand distribution capabilities. McIntosh stressed that “coming up with new structures and innovations is absolutely crucial” if lenders are to maintain momentum and continue supporting sponsors at scale.
Focusing on the rationale behind these structures, Nick Rusling, director – fund solutions, Investec, described securitisation as “a buzzword” unless lenders clearly define the problem they are trying to solve. For Investec, the issue was not simply capital relief, but the need to move exposures fully off balance sheet while diversifying funding channels. Rusling explained that securitisation provided “another way to distribute” risk and created access to a broader institutional investor base, including insurers and pension funds. He added that the structures offer flexibility for general partners because funding can come from “multiple sources” rather than a single bank relationship.
Rusling also highlighted operational considerations, explaining that existing framework agreements with clients made it easier to rotate revolving and term facilities into securitisation vehicles. Attempting to securitise standalone facilities without such infrastructure, he suggested, would be “a lot more difficult”.
On the ratings side, Ashley Thomas, head of structured finance (UK), Arc Ratings, explained that agencies analyse not only the securitisation vehicle itself but also the underlying subscription facilities, LP base and concentration risks. “We need to know who each of the LPs are,” he said, emphasising the importance of transparency and data availability. Thomas added that GP resistance to sharing LP information has eased over the past two years as market participants increasingly recognise the funding benefits securitisation can provide. He also stressed the importance of eligibility criteria, portfolio concentration limits and stress-testing scenarios in protecting transactions from correlated LP exposures.
From a legal perspective, Natalja Taillefer, partner, Loyens & Loeff, emphasised the importance of asset transferability, bankruptcy remoteness and concentration controls. She described the need to analyse both the individual subscription facilities and the broader portfolio dynamics underpinning the securitisation structure.
Evans concluded that while “uncertainty is certain”, subscription line securitisations are increasingly moving into the mainstream and could see stronger adoption during the next fundraising cycle.
