Talking point - How to assess a CDO manager
What criteria do buyers use when weighing up the strengths and weaknesses of CDO managers? Will the choice of manager affect spreads? Credit canvasses market opinion
Ratul Roy,
Citigroup
Statisticians would argue that decades of performance data are required to identify portfolio managers who consistently outperform the market. Why should evaluation of CDO managers be any easier? Thus, it is not surprising that pricing in the CDO market, which has a 10-year track record at best, does not seem to differentiate between managers.
A lack of pricing differentiation should not give rise to a naive hope that all managers will perform equally. Ten managers
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