What is the difference between a structured investment vehicle SIV and a special purpose vehicle SPV?

What is the difference between a structured investment vehicle (SIV) and a special purpose vehicle (SPV) Introduction: The World of Investment Vehicles Before we dive into the intricacies of Structured Investment Vehicles (SIVs) and Special Purpose Vehicles (SPVs), let's take a moment to understand the broader landscape of investment vehicles. In the realm of finance, various instruments exist to channel funds, manage risk, and facilitate transactions. From traditional stocks and bonds to more complex derivatives, these vehicles serve diverse purposes. Today, we'll focus on two such instruments: SIVs and SPVs. Structured Investment Vehicles (SIVs): A Multifaceted Approach Structured Investment Vehicles, or SIVs, are entities created to pool capital from multiple investors. These vehicles are known for their flexibility and ability to invest in a wide range of assets, including mortgage-backed securities, collateralized debt obligations, and even derivatives. SIVs often employ leverage, meaning they borrow funds to amplify their investment potential. This leverage can lead to higher returns, but it also exposes SIVs to increased risk, especially during market downturns. Special Purpose Vehicles (SPVs): Tailored for Specific Objectives Unlike SIVs, Special Purpose Vehicles, or SPVs, are designed with a specific purpose in mind. These vehicles are typically created to isolate and manage risks associated with a particular project or investment. For instance, a company might establish an SPV to finance the construction of a new facility. By doing so, they can ring-fence the associated risks, ensuring they don't permeate the company's overall financial health.