A 35-year-old numbers wonk is helping revive one of the financial crisis' most controversial products (CITI)

pulse

September 26, 2017 5:21 PM

Synthetic CDOs are on the rise, but Citigroup claims they are fundamentally different this time around.

Collateralized debt obligations, or CDOs, came to infamy 10 years ago as a hallmark of the global financial crisis. Now, Citi wants to once again become the dominant player in this $70 billion market.

that Jia Chen, a 35-year-old director at the bank, has spent two years between New York and London hawking synthetic CDOs to potential investors — and promoting returns as high as 20%.

Chen’s no newcomer to CDOs, either. While still relatively young by industry standards, the "

Ten years after the recession, low volatility in financial markets coupled with near-zero interest rates have left investors looking for higher returns, at the expense of much higher risk. CDOs, which bet on the performance of mortgage-based products, among other things, can provide this.

A Citi spokesperson reiterated that the products were fundamentally different — and thus safer — this time around because "

The bank returned to the CDO market in 2013, but demand didn't pick up until 2015. Today, the products make up about $100 million in revenue annually, or just 0.5% of Citi's total income.

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