CLO equity offers opportunity but few funds stand ready

CLO adobe stock 575 375
By Owen Sanderson
12 Nov 2020

CLO equity is still a scarce commodity, despite better than expected performances from the asset class this year in the face of the pandemic. Some investment firms are said to be raising CLO equity funds, but others suggest it remains hard going, and managers with captive funds will remain in charge.

CLO equity has confounded fears earlier in the year that it would be in the front line of Covid-induced chaos in the leveraged loan market.

Equity distributions have returned to the levels seen late last year, and credit performance has improved, with overcollateralization levels and downgraded asset metrics ...

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