The Challenge of CDO Squared
Risk Magazine - March 2005/Volume18/No3
by Navroz Patel

Janet Tavakoli – a former head of financial engineering at Westdeutsche Landesbank in London – advises prospective CDO squared investors to be wary: “If you think you will be able to analyse each underlying CDO, then look at the overall structure and get a clean answer about risk, you are mistaken. It’s way too complex,” she says. Tavakoli now runs a consultancy – Tavakoli Structured Finance – in Chicago.

Inexperienced CDO investors sometimes heavily rely on rating agencies’ assessments when forming opinions about the attractiveness of potential CDO squared deals – something Tavakoli says can be dangerous.


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Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct professor of derivatives at the University of Chicago's Graduate School of Business. She is the author of: Credit Derivatives & Synthetic Structures (John Wiley & Sons, 1998, 2001), Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, 2008).

Janet Tavakoli's book on the global financial meltdown is Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street (Wiley 2009).

Clients of Tavakoli Structured Finance have the benefit of proprietary consultation, which is not available in any other paid or public forum. Clients also commission proprietary research and analysis.

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