SGAM AI Closes CFO Premium Offering

Jan 24 2007 | 11:41am ET

U.K.-based SGAM Alternative Investments has closed its CFO Premium, a market-value collateralized fund obligation with a five-year scheduled maturity, at €200 million (US$260 million).

The CFO Premium is based on the collateralized debt obligation securitization technique but unlike a CDO, the underlying collateral is a fund of hedge funds, which replicates the firm’s fund of funds, SGAM AI Premium Fund, management process without leverage. The CFO Premium offering includes four debt tranches, rated by Moody’s Investor Service from Aaa to Baa2, and one equity tranche.

The CFO was distributed to a range of investors from traditional CDO investors to hedge funds specialists, according to the firm. The debt tranches 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, securitization techniques, tight spread environment and current investors’ appetite for enhanced return to offer this unique product,” stated Steven Le Moing, manager of CDOs and securitization in the structured asset management group of SGAM AI.

The firm plans to distribute additional CFO’s in 2007 in accordance with its plans to be a “major actor” in structured credit products.

In other firm news, SGAM AI recently hired three directors of institutional sales to cover Europe and the Middle East. Karen Gabay, Marlene Francisco and Nader Salman are based in London and will be responsible for marketing SGAM AI’s range of products to institutional investors, reporting to Alastair Smith, head of hedge fund sales Europe and Middle East.

Gabay recently served as European head of credit sales at Société Générale Corporate & Investment Banking. Francisco joins from Goldman Sachs Prime Brokerage as executive director, and Salman was previously a director of institutional business development for PlusFunds in New York.

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