Bespoke CDO

A bespoke CDO is a structured financial product—specifically, a collateralized debt obligation (CDO)—that a dealer creates for a specific group of investors and tailors to their needs. The investor group typically buys a single tranche of the bespoke CDO. The remaining tranches are then held by the dealer, who will usually attempt to hedge against losses. Tranches are portions of a pooled asset divided by specific characteristics.