CLO investors shift as banks make way for smaller buyers

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By Paola Aurisicchio
19 Nov 2020

The Covid-19 pandemic has reshuffled the CLO investor base, with big bank buyers cutting their exposures, and insurers and mutuals gaining shares. Smaller pension funds and high net worth individuals have also entered the sector, tempted by the surprisingly strong performance of the asset class through the crisis period.

The US CLO market, with $705bn outstanding, has grown 9% this year, despite the pandemic-driven panic in March stopping issuance altogether and a wave of leveraged loan downgrades straining portfolios, according to analysts at Barclays.

But as corporate quarterly earnings beat expectations and central banks boost markets, leveraged ...

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