The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

CDOs: Old hands face up the shock of the new

The rapid influx of new managers to the CDO market is a staffing headache for established players.

Existing CDO managers are struggling to retain key talent as new firms enter the market. Speaking at the American Securitization Forum conference in Las Vegas in February, Pat Maley, director of asset-backed securities at Deerfield Capital Management, said that this was one of his biggest challenges. “We constantly worry about losing our staff and, because of that, we are constantly on the lookout for new people,” he said.

The number of new managers, and the rapid increase in deal volume, is also making experienced managers frustrated that there is little distinction in pricing between deals done by new entrants and those done by firms with a proven track record. “Our hope is that down the road there will be more tiering. When collateral and CDO managers have been performing well, they should be rewarded when they come back to the market,” Ed O’Hara, senior portfolio manager at Vanderbilt Capital Advisors, told the conference.

The loss of talent at established CDO managers is also putting pressure on ratings. Kevin Kendra, senior director in credit products, who manages performance analytics at Fitch Ratings, says that the normal impact of a change of personnel is short lived. “From a practical stand point, what generally happens is that manager activity of CDO administration slows down during these transition phases, effectively making the deals static transactions on a temporary basis,” he says.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree