Societe Generale Alternative Investments (SGAM AI) has closed CFO Premium, a market value Collateralised Fund Obligation with a 5 year scheduled maturity, managed by SGAM AI and arranged within SGAM Group. CFO Premium has been fully subscribed and has reached its maximum size of €200 million.
The CFO Premium is based on the Collateralised Debt Obligation (CDO) securitiSation technique. However, unlike a classic CDO, the underlying collateral is a Fund of Hedge Funds which replicates the SGAM AI Premium Fund management process without leverage.
The deal was successfully distributed to a wide range of investors from traditional CDO investors to Hedge Funds specialists. The debt tranches, over-subscribed by fixed income investors, offer diversification from traditional asset classes, whereas investors at the equity tranche benefit from efficient leverage and therefore from an enhanced targeted performance.
“We have used the successful combination of Hedge Fund, securitisation techniques, tight spread environment and current investors’ appetite for enhanced return to offer this unique product,” says Steven Le Moing, the manager of CDO & Securitisation at the Structured Asset Management Group of SGAM AI.