Dresdner Kleinwort Wasserstein has set up a joint venture between its collateralized debt obligation group and its credit-default swap trading desk. The firm set up the arrangement because it has started taking more equity risk in its deals and needs closer trading ties to manage the positions.
"Now when we see an opportunity we can react more quickly," said Darren Smith, co-head of CDOs in London. He added that it is taking the first loss risk in its EUR3 billion (USD3.4 billion) CDO of CDOs, dubbed Alexandra, which was priced last week.
