. 201d a cdo is a managed investment vehicle which purchases a portfolio of diversified highly-rated assets . a cdo funds purchases through the issuance of several tranches of debt and equity , the repayment and return of which are linked to the performance of the assets in the cdo . typically , our involvement is as collateral manager . we may also invest in a small percentage of the debt issued . these entities typically meet the definition of a variable interest entity as defined by fin 46 ( r )