A number of market sources are predicting a Darwinian fate for CDO managers similar to that playing out among subprime mortgage lenders, as the credit cycle turns and funding can no longer be counted on. And while those established in the CDO sector have been eagerly awaiting spread tiering and greater availability of collateral, it's interesting to note that even among the Wall Street insiders, no one seems to have a firm grasp on just how many active CDO managers there are today.
The rating agencies also have admitted that they have difficulty staying on top of them. Reuters quoted Vincent Matsui, a senior director in Fitch Ratings' asset manager ratings group last Wednesday saying the rating agency has a backlog of 60 new managers that need a profile and a rating. Fitch currently has profiles for 66. About a third of those dabble in subprime securities, Reuters reported. Standard and Poor's has 83 profiles available.