Structured Credit Is Booming: Why We Expect Continued Growth and a Hiring Surge in 2025 at Laz Partners
At Laz Partners, we’ve seen a major surge in hiring demand within the structured credit space, with asset classes such as ABS, CMBS, RMBS, SRTs (synthetic risk transfers), and ground leases (to name a few) driving this hiring wave. Demand is especially high for investment talent who can run deals from origination through to execution, as well as structured credit quants/modellers (due to the huge amounts of complex data that need to be analyzed with many of these deals).
Here are some of the factors fuelling this growth:
1?? Search for Higher-Yielding Investments
With rising interest rates, structured credit products offer higher risk-adjusted returns, attracting insurance and pension capital seeking stable income while managing risk.
2?? Regulatory and Capital Efficiency
Frameworks like Solvency II have historically driven demand for structured credit by encouraging efficient capital usage, and recent UK reforms have amplified this trend. Changes such as reduced capital buffers and relaxed matching adjustment rules are enabling insurers to allocate more capital to structured credit assets like ABS, RMBS, CMBS, and SRTs. This increased flexibility and investment capacity make structured credit an increasingly attractive option for insurers seeking higher yields and long-term stability, further fueling growth in the space.
3?? Diversification and Resilience
Structured credit products like ABS, CMBS, and RMBS allow investors to diversify into areas like consumer credit, real estate, and auto loans. Their proven resilience during market stress has further boosted confidence.
4?? Growth in Ground Leases and Infrastructure-Like Assets
Ground leases, with their inflation-linked, long-term cash flows, are gaining popularity among institutional investors as secure, bond-like investments.
5?? Technological Advancements
New analytics tools have improved risk assessment and management, making structured credit more accessible and attractive to investors.
6?? Global Credit and Real Estate Trends
Recovering real estate markets (CMBS and RMBS) and growing activity in distressed assets and securitizations are creating opportunities across the U.S., Europe, and emerging markets.
The structured credit boom is set to continue in 2025 as regulatory pressures and investor appetite for yields keep driving demand, and at Laz Partners, we’re actively placing top-tier investment talent with our clients to support this expansion.
