The buyers of the debt instrument offered by the SPV are the investors in a private securitization. Investors are typically sophisticated in order to understand the various structural nuances associated with these types of transactions. Depending on the form of solicitation and distribution of the debt instrument offered, investors may need to meet the definition of accredited investor, qualified purchaser or qualified institutional buyer in order to participate.
The role an investor specifically plays in a private securitization is the party or parties that are supplying the debt capital to originators to fund their origination activities. In return, investors receive all the rights and remedies outlined in terms of the debt instrument they purchase. They are responsible for conducting due diligence to determine whether or not the risk-reward tradeoff is suitable for their investment needs and tolerances.