Oddo: Cash Titrisation; Cash Arbitrages; and Court Terme Dynamique - Subprime

Oddo & Cie is closing three hedge funds with a billion euros in assets. The culprit for closing? U.S. Subprime. Per Bloomberg:

Oddo said it will wind down the funds within the "shortest possible time frame" because of a plunge in prices for collateralized debt obligations, notes backed by other bonds, loans and their derivatives.

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"Like many actors, we have tried to revitalize the performance of our funds by investing in CDOs," Arnaud Ploix, a spokesman for Paris-based Oddo, said in an interview today. "Like others, we noticed recent problems with short-term liquidity and were caught out by the subprime dilemma."

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Oddo oversees 22 billion euros of investments excluding the three funds being closed. The funds, called Oddo Cash Titrisation, Oddo Cash Arbitrages and Oddo Court Terme Dynamique, held some 15 percent of investments in U.S. CDOs.

The manager will sell the securities least affected by the credit rout immediately, if the plan gets French regulatory approval, and will reimburse investors in September, the statement said. It may take "several months" to offload assets worst affected, the company said in the statement, published July 27. Le Figaro reported the company's plans earlier today.