An investment strategy can work well and still be difficult to scale.
This challenge arises when a manager needs to implement a strategy for clients with accounts at different banks or custodians, looks to consolidate it under a single instrument, or wants to expand its reach beyond its domestic market. For Latin American asset managers and investment advisors, this raises an important decision: How do you turn a strategy into a product that can support the growth of the business?
Technology has helped reduce many of these frictions. B2B fintech platforms can automate processes, streamline onboarding, or connect different providers. But managing a strategy and turning it into a financial instrument are two different needs.
When the goal is the latter, looking only at cost, digital experience, or time-to-market can leave out fundamental considerations.
From strategy to instrument
One of the alternatives available is securitization: structuring certain assets or strategies through a vehicle that enables the creation of a listed security linked to the underlying assets.
This is the space where FlexFunds, a specialist in structuring and administering investment vehicles, operates. The issuers under its program are Irish special purpose vehicles (SPVs), whose main activity is the issuance of notes. FlexFunds coordinates the structuring and administration of the ETPs, while the manager retains control over the investment strategy.
Ireland has a significant presence in this market. According to the Central Bank of Ireland, SPEs domiciled in the country reached €1.343 trillion in assets at the end of the second quarter of 2026, €65 billion more than three months earlier. Debt securities issued by these vehicles rose to €832 billion, €107 billion more than a year earlier.
These figures correspond to the Irish SPE (special purpose entities) sector as a whole, not specifically to structures like FlexFunds’, but they help gauge the development of this type of vehicle in the jurisdiction.
For the manager, however, knowing the jurisdiction is only the beginning. Before selecting a solution, it’s worth asking at least seven questions.
What problem do I want to solve?
Am I looking to reduce operational burden, consolidate a strategy, create an instrument with its own identity, or make it easier to add to different portfolios? Defining the objective helps determine whether what’s needed is mainly technology, a financial structure, or a combination of both.
Who issues the instrument?
Beyond the provider with whom the commercial relationship is maintained, it’s worth identifying the issuing entity, its jurisdiction, and the role of the different participants. The platform through which the service is accessed is not necessarily the entity that issues the instrument.
Where are the assets, and who holds them in custody?
Before structuring, the manager should understand where the underlying assets will be held and what responsibilities fall to the issuer, custodian, administrator, manager, and other counterparties.
How is the value of the ETP/ETN determined, and what information will I have access to?
A dashboard makes information easier to access, but it doesn’t replace a valuation methodology. It’s worth understanding how the NAV is calculated, how often, and what reporting mechanisms are in place.
As a reference for how deep this kind of institutional analysis can go, the European securitization framework requires, where applicable, assessing both the risks of the underlying exposures and the structural features that could materially affect the instrument.
Will my clients be able to add the instrument to their portfolios?
Having an ISIN makes it easier to identify a security, but it doesn’t by itself guarantee acceptance by any given bank or platform. Custody, eligibility, clearing, settlement, and each intermediary’s specific requirements also need to be part of the analysis.
In FlexFunds’ model, the ETPs/ETNs carry an ISIN or CUSIP and use Euroclear as part of their operations. Euroclear Bank, as a reference point for the scale of this infrastructure, provides settlement services for international securities and the domestic securities of 48 markets.
What happens if a counterparty stops providing service?
Maintaining the investment vehicle should matter just as much as launching it. However, before selecting a structure, it’s also worth understanding the mechanisms in place for a potential replacement of custodians, administrators, or other critical participants.
The importance of this point can be seen again in the European securitization framework: among its transparency requirements, where applicable, it calls for disclosing events that involve the replacement of counterparties.
Can the structure grow with me?
This is probably the most important question. A solution that works for current assets and client numbers can create new friction points once other investors, custodians, or markets enter the picture.
Cost and speed matter. But the legal structure, counterparties, valuation, reporting, and operational setup will also determine how far the vehicle can support the strategy’s growth.
Looking beyond the platform
For any asset manager looking to expand the reach of their strategies, technology and securitization don’t have to be mutually exclusive alternatives. One can make it easier to manage a strategy; the other can change how it’s structured as an instrument.
The experience of investment vehicle specialists like FlexFunds makes it possible to see the different layers that come into play when a strategy is structured through an ETP: issuer, jurisdiction, custody, valuation, reporting, and operational infrastructure.
That’s why, before asking how much it costs to structure a strategy or how long the process takes, it might be worth starting with another question:
What do I need this vehicle to let me do tomorrow that my strategy can’t do today?
FlexFunds specializes in designing investment vehicles (ETPs/ETNs) through a securitization program. Learn how our process works, and work with our team to assess which structure best fits your investment strategy.
