Raya Holding is planning to set up a fund that will invest in the portfolios of non-banking financial services (NBFS) companies, Al Mal reports, citing people familiar with the matter. The company will partner with an unnamed asset manager to set up the fund, the targeted value of which was not disclosed.

Think of it as securitization through a different door: The fund will raise money from investors to invest in the portfolios of non-bank lenders. The NBFS lender gets the net present value of a portfolio of loans now, and the fund collects the regular payments and takes both the upside and the risk. The sources didn’t specify whether the fund would be open to both retail and institutional buyers.

The fund’s first investment could see it take part of subsidiary Aman Holding’s portfolio, a move that would see Raya scrap plans to take EGP 600 mn in securitized bonds to the market later this year.

Background: The Financial Regulatory Authority last summer allowed a new type of fund specialized in what finance nerds call “movable assets.” Those funds provide liquidity to businesses by using assets such as accounts receivables, inventories, and machinery as collateral. Unlike securitization, this doesn’t require issuing bonds or the setup of a special purpose vehicle.