SPV

SPV, or Special Purpose Vehicle, is a separate legal entity created by a parent company to isolate financial risk. It’s commonly used in complex transactions like asset financing or securitization, where the SPV holds specific assets or liabilities. By isolating these, the parent company limits exposure to financial or legal risks related to those assets. Essentially, an SPV acts as a dedicated "box" to manage certain investments or liabilities, ensuring that issues in the SPV don't directly impact the parent company's overall finances. This structure improves risk management and can facilitate funding or investment strategies.