Securitisation of IPR

Securitisation of IPR

IP and licensing securitisation transactions were worth circa $380million in 1997 but had grown to a value of $15billion in 2002. It is becoming a vital source of funding for companies and as standard as that using tangible assets. We cannot name clients in this regard but the good news is that even the main clearers have relied upon our valuations.

Banking on IP - An active response from Intellectual Property Office to our Report 

In 2013 UK Intellectual Property Office (IPO) commissioned Valuation Consulting and Kelvin as co-author to investigate whether those who created or owned IP assets could use them to secure the financing needed for company growth. We circulated the Report (Click here for report) containing key recommendations; a resource toolkit for SMEs, lenders and other financiers to facilitate lending opportunity and lending, and to build on existing initiatives and Government interventions to assist SMEs, in November 2013.

Following publication together with other analysis IPO convened round table discussions including Banks, Equity Investors and Insurers, the business advisory community, IP professionals, lawyers, accountants, general commercial advisors and SMEs.

IPO’s reply was published last week ‘Banking on IP An Active Response’ (Click here for report) It is pleasing to note that there are number of approving and constructive references to the original report and flattering feedback such as “considerable praise for rigour… and agreement with its principal findings and recognition.”

Key action points that IPO will actively promote include, improved understanding of IP and its value to business, SMEs and lenders through its IP for business tools and building upon the recommended common language to form a foundation for templates, guidance and a toolkit.

The ‘Reducing Risk’ section refers to Risk Insurance. Valuation Consulting is currently working with leading insurance professionals developing a non-legal expenses IP insurance product and significantly endorses the view that “insurance can also play a role where a lender provides money to a business on the basis of an IP portfolio and the business subsequently defaults.”

Report co-author Kelvin King, Managing Director, Valuation Consulting comments:

The IPO’s goal, to create the systems to give lenders confidence in assessing the value of IP and the risks involved in lending against it, sit comfortably with my role as Vice Chairman Royal Institution Chartered Surveyors Business Valuation Board. The new Red Book Chapters covering separately intangible asset and business valuation and the Chartered Valuation Surveyor and Registered Business Valuer credential will provide comfort to lenders in the same way Chartered Surveyors have achieved over many decades with Red Book real estate valuations. Firms and individuals so qualified comply with RICS requirements and understand that valuations may be subject to monitoring under the RICS’ conduct and disciplinary regulations. 

Click here to see an extract from the April, 2014 issue of the CIPA Journal relating to Kelvin's report.


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