Funding corporates with high expenditures for reseach and development
and an asset side that is hence characterized by a high portion of
intangible assets is one of the most challenging disciplines in
corporate finance. Due to the still existing lack of pragmatic and
sophisticated evaluation methods for intellectual property, these
corporates' dependence on bank lending does not seem to end in the
nearer term. Starting with the Bowie Bonds in 1997, securitization of
intellectual property as a potential funding alternative appeared on the
scene. Capital market investors now have the opportunity to diversify
their portfolios with unique investments such as royalties from sales of
an AIDS drug, revenues from James Brown's music or even the success of
the latest Hollywood blockbusters. Ten years after the first transaction
was closed, today most of these corporates still depend on bank lending.
Based on an introduction of general challenges of corporate funding, the
author Alexander C. Kirsch provides a broad overview of the world of
intellectual property. Extensive market research and practical examples
help to explain benefits and drawbacks of the securitization instrument
in that context. To support feasibility of securitization in daily
business practice, the author introduces a potential scoring tool for
the identification of eligible intellectual property assets and he
explains key elements and challenges in the structuring of such a
transaction. Due to the topic's novelty, this book is of interest for a
broad range of readers, ranging from corporate finance managers over
bankers to general economists. The book takes the perspective of a CFO
in an intellectual property intense industry and it can hence be used as
a comprehensive guideline for the analysis and execution of an
intellectual property securitization.
