Hey, mom and pop, tell us again how you price those PE bonds

WHAT do Singapore's retail investors know about valuing private equity (PE)-backed collateralised fund obligations?

As Temasek-linked private equity investment firm Azalea Asset Management prepares to launch its second retail offering of PE bonds, market regulators, issue managers and yes, even the media, need to think hard about how to better educate the general public about the financial products being sold to them.

Failure to do better will lead to more Hyflux-type occurrences, where many retail investors who bought the water and power engineering company's retail fixed-income products failed to appreciate the risks of their investments and their standing in a default scenario.