Damage Quantification: The Market for Structured Credit Advisory Services

Abstract

In the middle of a major crisis that was partially triggered by the structured finance market, the need for a new type of analytical consulting service has been evolving: structured finance advisory. This article describes how a crisis of the financial system has caused specialized providers in the financial arena to create value in a situation where overall market value is being destroyed. Advisory services have been quietly provided for over a decade, but as the issues in the markets have focused attention on structured credit, the demand for and prominence of these groups have grown. As a result, the breadth and depth of services provided have expanded to meet the increased need. The authors discuss the types of services and the lifecycle of advisory engagements, considering what kind of skills are needed to address market needs. The outlook for the advisory services industry to establish itself as an ongoing business beyond the current market crisis is positive.

TOPICS: CLOs, CDOs, and other structured credit, credit default swaps