Although Ivy Asset Management's $300 million collateralized fund obligation (CFO) was postponed last quarter, JPMorgan closed a multiple class offering of a fund-of-hedge-funds for the client.

The funding for Ivy combines modest-term leverage and principal protection, and was distributed in the form of fund shares, notes and indexed "schuldscheine" securities, which have been described as a German form of securitized loans.

The principal-protected deals were described by sources as an effective shift by JPM and Ivy in meeting investor needs post-Sept. 11. Reportedly, some of the investors that walked away from investing in the Ivy CFO participated in the Ivy principal-protected deals. All of the Ivy deals were done by JPM Global Structured Finance group. Ivy's $300 million CFO deal is currently being restructured and is expected to resurface this quarter, followed by a second CFO.

Sources report that the target investors for these deals are insurance companies, money managers, and private banking clients that are open to new asset classes.

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