BASIS Capital’s Basis Yield Alpha Fund goes bust..
The Basis Capital web site says:
A globally focused fund investing in a diversified portfolio of relative value and arbitrage opportunities in international markets, across liquid Eurobonds and less liquid structured credit securities.
while the article on The Age web site says:
The Basis Yield Alpha Fund had invested mainly in collateralised debt obligations (CDOs), bundles of bonds, loans and asset-backed debt securities that are divided into sections, or tranches, including the high-risk subprime mortgages.
While the aim of the CDOs is to spread the risk, commentators have described the process as being like putting horse dung and rubbish into a grinder to make sausage.