Managed CDO

A CDO in which a portfolio manager is appointed and paid a fee to make changes to the collateral or reference portfolio during the life of the transaction. The life of a managed deal can be divided into three phases. The first is the ramp-up, lasting up to a year, during which the manager invests the proceeds of the sale of the CDO's securities. Second is the reinvestment or 'revolver' period, where the manager actively manages the CDO collateral, reinvesting cashflows as well as buying and selling assets. In the final period the collateral matures or is sold and the investors are repaid.