Pension funds eye riskier CLO tranches

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By Paola Aurisicchio
08 Apr 2021

A growing number of pension funds are turning their attention to the riskier part of the CLO capital stack in search of extra yields, attracted by the risk-adjusted returns offered by CLO equity and mezz, compared with other fixed income asset classes.

The $9bn Rhode Island Employees’ Retirement System has disclosed its plan to eliminate its 2% allocation to real estate investment trusts (Reits) and master limited partnerships (MLPs), and to allocate the same percentage to CLO mezz and equity, according to a staff memo from a March 24 ...

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