Looking to raise some cash? Against IP?

To the surprise of many, Morgan Stanley has just announced a new US$ 250 million intellectual property (IP) securitisation for Vertex Pharmaceuticals, a large US bio-tech company. In the world of the credit crunch, people had been prophesying that such exotic instruments were unlikely to raise their heads again; this has not proved to be true.

In fact, others are arguing that – for the right company – this market remains one to be tapped. IP as a financial asset is now gaining a higher profile in consequence of a combination of IFRS 3, the new UNCITRAL Guide to Secured Lending and the Sarbanes-Oxley transparency requirements for accounting for and managing intangibles transparently. Actively managing your IP in the most appropriate way, by either securitising the IP assets to raise funds (as in the Vertex case) or using similar techniques for internal purposes, is at least worth further investigation.

Read Wragge & Co's in-depth analysis.