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

2007-07-31

Count of distinct funds: 3

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stories: bloomberg.com

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.

...

"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."

...

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.

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Important: This fund is on our list of hedge funds that have "imploded" (see also ailing lenders). However, please note that "imploded" is a somewhat subjective. The "imploded" list contains hedge funds (or other unregulated and autonomous speculative investment funds) which have gone through some sort of permanent adverse change. This is a somewhat subjective call, and does not necessarily mean total shutdown or bankruptcy. It can also mean steep and rapid mark-downs in net asset value; or abnormal "bail-out" by corporate parents or peers in order to avoid write-downs and provide liquidity. The funds are of any type and sector.