European collateralised loan obligations – or CLOs – are bonds issued to fund a specific and diverse pool of corporate loans to firms of different sizes and in different industries all over Europe.
In some quarters, the perceived complexity of CLOs has turned investors away from this intriguing asset class. However, at TwentyFour Asset Management we believe CLOs can offer a range of potential benefits for investors, and they could be a positive additional feature in more investor portfolios. With the right dedication to due diligence, in our view they can be an attractive alternative to more mainstream fixed income investments such as corporate bonds.
This video explains how CLOs are structured, how the process works for investors and what protections are in place for bondholders.