Wall Street's billionaire machine, where almost everyone gets rich

People and companies are cashing in on a record boom in a once-marginal investment

He has the familiar trappings of the ultra-wealthy: a Beverly Hills estate, a superyacht, art by Rothko and Pollock.

But Eric Smidt is a new kind of super-rich. He made his fortune by transforming an old-fashioned business into a giant ATM, an overhaul aided by one of the hottest plays on Wall Street: collateralised loan obligations. Meet the new aristocrats of debt—the people and companies cashing in on a record boom in these once-marginal investments whose relatively high returns have attracted yield-hungry investors. They’ve fueled a rapid buildup in corporate debt that some think could become the epicentre of the next