Institutional Investor: This Is The Most Underutilized Trillion-Dollar Asset Class

In the aftermath of the Global Financial Crisis (GFC), Collateralized Loan Obligations (CLOs) emerged as a contentious topic and were viewed through a cautious lens. However, as financial markets have evolved, the asset class has been gaining wider prominence as one of the most underutilized areas of opportunity and diversification in the alternatives space. Particularly in a market where interest rates remain high, CLOs have been offering investors compelling coupons, lower volatility, and comparable liquidity to Investment Grade (IG) Corporate bonds. In a bid to protect their portfolios against interest rate erosion, major banks like J.P. Morgan, Bank of America, and Citigroup have been paying attention, buying up top-rated CLOs that carry SOFR-based floating-rate coupons, helping propel credit gains. The question then remains, if CLOs are now a viable complement to traditional fixed income investments, garnering mainstream interest and consistently outperforming lower rated alternatives – then why aren’t more investors taking notice?

II discusses these topics with Crescent’s James Guido and Wayne Hosang. Read the interview here.

This interview expresses the views of the author as of the date indicated and such views are subject to change without notice. Neither the author nor Crescent Capital Group LP (“Crescent”) has any duty or obligation to update the information contained herein. Further, Crescent makes no representation, and it should not be assumed, that past investment performance is an indication of future results.

Crescent makes this interview available for information purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as an offering of advisory services or an offer to sell or solicitation to buy any securities or related financial instruments in any jurisdiction. Nor is the information intended to be nor should it be construed to be investment advice. This interview, including the information contained herein, may not be copied, reproduced, republished, or posted in whole or in part, in any form without the prior written consent of Crescent.