LAGUNA NIGUEL, Calif. - Amid a rash of CDO structural innovations designed to lure equity investors, a familiar debate is again rearing its head - whether CDO managers should invest in the equity of the deals they manage. While some investors say a manager that puts its "own skin in the game," demonstrates confidence and commitment toward its product, others say a manager's equity investment could present a conflict of interest.

"It is definitely a plus to us when we see the manager has invested in a small piece of the equity," said Sandra Johnson-Harris, a director at Invesco, speaking at Opal Financial Group's CDO Summit held here last week.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.