In what may not come as a huge surprise to market participants, large CDO managers in 2005 became even larger - with 28 collateral managers representing half of the U.S. CDO market in terms of outstanding liabilities by the third quarter of the year, according to Standard & Poor's. The 10 largest managers last year comprised almost 30% of the CDO market.

Conversely, in 2004, 35 managers made up 50% of the CDO market, with the 10 largest managers accounting for 25% of the market. The rating agency found three main trends among collateral manager participation in 2005: the largest CDO collateral managers increased market share; a higher number of new managers entered the space - particularly in the ABS CDO, CLO and commercial real estate CDO sectors; and the more established managers ventured into new asset types.

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