Funds load up on risk in search for returns
Investors in yield chase are investing in complex products that helped cause the financial crisis
London
IN a world of rock-bottom interest rates and negative bond yields, maybe it was bound to happen.
Products synonymous with the credit crisis such as "collateralised debt obligations" and "synthetic securitisation" are returning as investors take on more risk while banks are forced by regulators to reduce it. One of Europe's largest pension funds put itself first in line for losses on an 8.4 billion euro (S$12.9 billion) portfolio of corporate loans in exchange for a likely double-digit return, according to two people familiar with the matter.
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