Specialised IB Team series: The Asset-Backed Securities Team

This week, we'd like to give you a sneak peek into the different #investmentbanking and S&T teams that you can apply for.

Usually, in S&T there is a specific team that handles Asset-Backed Securities (ABS). It refers to structured products that are backed by assets (mortgage/factory/plant/land). But basically, they package such assets into a structured product and sell it in the financial market. So typically institutional investors (family office/corp/ AM firms) will purchase such products from investment banking or the sales & trading arm. And the reason they buy such products is owing to the higher interest rates offered.

The reason why students must know about ABS is that sometimes S&T interviews can include questions on asset-backed securities. Especially in HK and Singapore interviews, there are quite a few ABS teams that are recruiting junior staff. 

ABS products are infamous as the key reason for the financial crisis that brought down the collapse of major banks and the markets. However, after almost 15 years that memory seems to have faded a bit since, in the last 2-3 years, the ABS market has witnessed greater activity. While from 2008 to 2015, this particular market stayed tepid, sentiment improved from 2016 onwards. Under ABS there are a lot of products but they underwent several changes over the years. 

 

Going back to the reasons why you must know about ABS, general S&T interviews can put you on a spot by asking questions like how asset-backed securities are priced or how they are structured. If you are targeting internships and jobs in the Hong Kong and Singapore market, you’ll do great by preparing in advance for such interviews to show off your product and technical knowledge!

Give us a 👍 if you want to know about the other teams that your can target apart from ABS!

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