Investment Products: CypressTree's clients are major financial institutions. We are passionate about the investment products and services that we provide and strive to build long-term, mutually beneficial relationships with intermediaries, direct investors and consultants. Our emphasis is on recognizing and meeting clients' needs and in the delivery of products which are responsive to those objectives as well as fit with our management capabilities and standards of excellence.

We deliver a wide range of products for institutional investors which include funds, structured and separate products.

Funds: CypressTree is committed to providing quality products to institutional investors. The loan asset class has historically been restricted to large money center banks and major institutional investors through their U.S. Offices. CypressTree has created products which now make the loan asset class available to non-US and US institutions and their clients. Fund Structure can be un-leveraged or leveraged depending upon investors' risk profile.

Structured Products: In 1989, CypressTree created the first actively managed Collateralized Loan Obligation (CLO). As a pioneer in the CLO/CDO market for non-investment grade loans and high yield bonds, CypressTree is experienced working with rating agencies, underwriters and investors to meet the objectives of all parties.

Collateralized Debt Obligations (CDOs) are structured securities which comprise a portfolio of debt obligations, usually loans and/or high yield bonds. CDOs are created using a special purpose vehicle which issues various classes of debt, the largest portions of which carry investment grade ratings. The rating on each class is determined by the overall quality of the underlying portfolio, credit enhancement through over-collateralization and the priority of payments from the cash flows generated by the pool of assets.

The underlying collateral in a CDO is comprised of a highly diverse portfolio of non-investment grade loans and/or bonds. The portfolios are constructed using a very stringent list of predetermined criteria which include credit quality, maturity, diversity, obligor/industry concentration limits, average life and average spread.

We have successfully created and managed six such CDOs which were designed to meet the investment objectives and return requirements of the market at the time of issuance. The most recent introduced an innovative reinvestment structure which will benefit investors significantly under a wide range of market conditions.

Separate Products: CypressTree Investment Management offers a separate account service to large institutional investors. With each separate account, a detailed portfolio specification is agreed upon which sets out precise objectives, risk parameters and benchmarks. In this way the institution benefits from a service which is exclusively tailored to its requirements and is provided with the essential tools to make the decision to meet its investment returns.

Synthetic CDOs:  Building upon the recent advances in structuring technology, Synthetic CDOs are a relatively new entry into the world of Asset Backed Securities. Much like a traditional Cash Flow CDO, a Synthetic CDO is a structured vehicle that invests in an underlying asset pool. At the outset of the deal a Special Purpose Vehicle (SPV) is created and issues debt to investors. The issued debt takes the form of different tranches, each with a different seniority and carrying a different level of risk. It is this structure of liabilities that allows the risk of the underlying asset pool to be divided and distributed among investors with different risk tolerances.

In a Synthetic CDO the asset pool takes the form of a Credit Default Swap (CDS) written on a portfolio of reference assets. Through the CDS the SPV sells protection against a pre-defined negative credit event on the reference portfolio, to the protection buyer. In exchange, the protection buyer pays the SPV a stream of quarterly payments. In this fashion the SPV assumes the economic risks, but not the legal ownership, of the reference portfolio. The cash proceeds of debt issuance by the SPV is invested in AAA rated securities and held as collateral against the CDS.

Synthetic CDOs have several advantages over their cash flow counterparts. These include a much shorter ramp-up period and the absence of operational friction resultant from servicing a large number of cash flow instruments. Often times CDS are cheaper to execute and offer a higher yield than the underlying cash instrument.

In 2005, CypressTree, in partnership with Calyon, launched it's first actively managed Synthetic CDO. The CypressTree Synthetic CDO I is based upon a reference pool of 80, predominantly High Yield, securities in 27 industries. The deal has a maturity of five years. Trading in the reference portfolio is limited to a 20% annual turnover rate.