Brand Securitization

  • Jan Lindemann


The asset value of brands is increasingly used to raise debt financing for a wide range of financial transactions. A key tool for this purpose is securitization. This is a structured financial process that involves the repackaging of cash-flow-producing assets into securities, which are then sold to investors. The securitization of intangible assets such as brands has evolved into an established corporate financing tool used to facilitate M&A, stock buy-backs, and risk transference to investors. As companies recognized that intangibles assets constituted a main portion of their corporate wealth their desire to use them like their tangible assets for financing increased. Chapter 2 established that about two-thirds of business value can be attributed to intangible assets. The total asset value of global intellectual property is estimated to be between US$4 trillion and US$7 trillion. In 2008, intellectual property (IP) licensing revenue worldwide exceeded US$500 billion (compared with an estimated US$18 billion for 1990). For example, IBM alone receives between US$ 1.5 billion and US$2 billion in annual licensing revenue. In addition, due to new worldwide accounting standards on the treatment of intangible assets their visibility has increased significantly.1


Private Equity Intangible Asset Tangible Asset Private Equity Fund Private Equity Firm 
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© Jan Lindemann 2010

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  • Jan Lindemann

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