German contagion looms as funds buckle

The news that two structured loan funds are in need of emergency support has exacerbated fears over German structured product funds.

Frankfurt-Trust Asset Management, the collateralised loan obligation (CLO) equity investor, has suspended redemptions to its investors in the FT-ABS plus fund. That development is all the more worrying because the CLO investor cites the US subprime mortgage crisis as having a negative impact on pricing and investor sentiment.

The manager is not the first to suspend

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