KBRA UK (KBRA) releases a report that examines the different strategies adopted by collateralised loan obligation (CLO) managers.
CLO managers are often evaluated on a tiering of their portfolio based on various metrics. But this evaluation method can sometimes produce counterintuitive results and does not always consider a manager's style and objectives. For example, should CLO managers be penalised for pursuing a more opportunistic strategy that produces a high weighted average spread, or viewed favourably if their portfolios are managed according to their objectives? In this update to our September 2022 report, KBRA examines cross-metric comparisons that could offer insight on potential strategies employed across the market. We continue to focus on some of the differences between CLO managers when evaluated across different cross-metric comparisons and highlight changes since our prior publication.
Key Takeaways
- While some opportunistically leaning managers have experienced a modest migration, they remain largely unchanged with eight managers remaining in the top 10 from September 2022. The two managers that have migrated into the top 10 are Fidelity International and Voya Alternative Asset Management
- There is a degree of turnover among the most conservatively leaning managers, with only four managers remaining in the top 10 versus September 2022. The four steadily conservative managers include Redding Ridge, Alcentra, Tikehau, and CVC Credit Partners.
- Opportunistic managers are less convincingly opportunistic compared to conservative managers who are more convincingly conservative. Of the top opportunistic managers, only two have seven cross-metric comparisons firmly in the opportunistic quadrant. In contrast, seven of the most conservative managers have seven or more cross-metric comparisons in the conservative quadrant.
Click here to view the report.
Related Publications
- 2023 Structured Credit Sector Outlook: A Whole New World?
- European CLO Manager Style Comparisons
- U.S. CLO Manager Style Comparisons
- European CLO Manager Style Comparisons: September 2022 Update
About KBRA
KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA's ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230216005434/en/
Contacts:
Gordon Kerr, Head of European Research
+44 20 8148 1020
gordon.kerr@kbra.com
Yee Cent Wong, Co-Head of Europe
+353 1 588 1260
yee.cent.wong@kbra.com
Gabrielle Gramazio, European Ratings
+44 20 8148 1001
gabriele.gramazio@kbra.com
Business Development Contacts
Mauricio Noé, Co-Head of Europe
+44 20 8148 1010
mauricio.noe@kbra.com
Miten Amin, Managing Director
+44 20 8148 1002
miten.amin@kbra.com
