Stock ownership is concentrated among the wealthy; junk bonds and collateralized loan obligations only more so.
So, too, with derivatives and securities based on debt — things like collateralized loan obligations.
Investors are bidding up junk bonds, commercial mortgage-backed securities and bundles of corporate loans called collateralized loan obligations.
Other sectors of this market, including car loans and collateralized loan obligations, are also showing signs of life.
"They took risk with those collateralized loan obligations," Mark Williams, who teaches finance at Boston University, says.
After the financial collapse, the group reviewed some collateralized loan obligations, financial products that were deemed toxic, and bought the safest aspects of those products.
Private Equity DEAL PROFESSOR Collateralized loan obligations, an important source of capital for many businesses, have made a modest comeback since the financial crisis.
The structured product that has been the fastest to revive is the one that encountered the least trouble in 2008: collateralized loan obligations.
The documents also reveal that Bain held stakes in highly complex Wall Street financial instruments, including equity swaps, credit default swaps and collateralized loan obligations.
Before the financial crisis, banks could securitize this debt into collateralized loan obligations, or C.L.O.'s, and sell it to third parties.
Collateralized loan obligations may seem at first to be nothing but a throwback to private equity's "golden era" of enormous leveraged buyouts.
