Alternative investments: Collateralized fund obligations issuance by FOHFs increases

More on collateralized fund obligations

CFOs are long-term managed structured finance products issued by a fund of hedge funds manager. The CFO issues several tranches of differently rated debt securities, and then equity securities, offering different risk-return trade-offs. Performance is based on the pool of underlying hedge fund assets. For example, in February P&G Alternative Investments, a fund of hedge funds and CDO group based in Italy, launched a €150 million CFO called Zoo HF 3.