Investors seek out equity tranches

New angles


Pedro Errazuriz, co-founder of Ocean Capital, a London-based investment firm, is one of those specialist investors. He believes that with IAS 39 (the international accounting rule that prohibits any continuing involvement in assets to achieve off-balance-sheet treatment) now in effect and the new Basel II bank capital regime on the way, there will be incentives for issuers to shift first-loss tranches off balance sheet.

Other ABS investors, such as Amsterdam-based Faxtor Securiti

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