Breakfast masterclass: An introduction to CLOs
If you’re unfamiliar with the CLO asset class or get lost in the soup of acronyms this education session will bring you up to speed. Our expert journalists will provide a brief overview of the CLO market, how CLOs are structured and the parties that come together to make each deal happen. From key risks to investment strategies this masterclass will give you the background you need to make the most of the day.
- What is a CLO? Who are the participants and how does it happen?
- Understanding the key cashflows and tests
- CLO debt and equity investment strategies
- How the secondary CLO market works
Creditflux’s editors provide their take on recent trends in the CLO market, and provide a snapshot of market issuance and performance to set the scene for the rest of the day.
Keynote fireside chat
Panel: Allocators outlook
It might not have been a record year for the CLO market, but 2022 still saw $114 billion of new issuance. But it was a harder time for CLO investors, with the Creditflux index of CLO fund performance down 7.7% YTD (as of the end of November). Our panel of expert allocators will talk us through how structured credit in general, and CLOs in particular, fits into their portfolios. How do they deal with the complexities of the asset class, and what advice do they have for new pension funds and insurance companies coming into the asset class for the first time?
- How will CLO strategies perform over the next twelve months?
- Should investors look at US or European CLOs, and should they keep to vanilla deals or look at more unusual structures?
- How should LPs approach manager selection?
- What are the pitfalls to avoid when pitching a CLO allocation to your board?
Panel: Loan market outlook
An investment in CLOs is an investment in leveraged loans, and this panel will look into how the collateral underlying the CLO market has performed in the last 12 months, and how it will fare over the year to come. Challenging macroeconomic conditions have already begun to weigh on the market as rating agency downgrades outstrip upgrades, but is this a temporary blip or a warning of deeper trouble to come? Is this an opportunity for loan managers to snap up some bargains or a year to play it safe?
- How will leveraged loans perform over the next twelve months?
- Should investors have serious concerns about credit quality with the space?
- Are the best opportunities in the primary or secondary loan markets?
- Have we solved the SOFR problem?
Dispatches from the CLO trenches
Two of the top lawyers in the market sit down with Creditflux to discuss what they’ve been seeing. What are the burning legal issues that investors in the CLO space need to take notice of?
Streams A and B
Join us for our two streams on "Accessing the asset class" or "Direct investing deepdive". But don't worry, you can watchwhat you miss online with our on-demand content.
Keynote fireside chat
Panel: Would you buy it?
Four top CLO funds walk us through their investment process as they consider our CLO investment case studies. From relative value to manager due diligence, what are the key questions every CLO investor should ask before they buy?
- Primary vs secondary
- US vs Europe
- Mezz vs Equity
- BSL vs MM
Networking drinks reception
It may seem like the last stage in the process, but choosing the right vehicle to invest in CLOs is critical to success. From dedicated CLO or structured credit funds, through separately managed accounts to new alternatives like interval funds there are no shortage of options available for investors. This panel will discuss the different options available for LPs looking to access the CLO market, including topics like:
- How big should you be before you consider direct investing?
- What are advantages and disadvantages of captive equity funds?
- How do interval funds compare with traditional fund structures for CLOs?
- Is there a place for liquid options like CLO ETFs?
ESG and CLOs
Investing in the CLO market remains a headache for LPs with ESG criteria. An increasing number of CLO managers market themselves as ESG compliant, but the market remains skeptical about how genuine they are – the recent Creditflux CLO Census revealed that the most common answer to which is the most ESG-aware US manager was “no-one”. What’s the solution for the growing number of LPs that need to track this metric in detail?
- How much pressure do US LPs really feel on ESG?
- Where is the CLO market on ESG criteria, and how do US and European CLOs differ?
- Are CLO funds able to provide the metrics that LPs need?
- How can the industry standardize reporting to reduce the duplication of effort, and are ESG ratings one answer?
Quickfire fund pitches
We ask three CLO investors to explain what sets them apart from the crowd, and why you should look at their funds. The catch? They only have ten minutes to tell you everything you need to know.
CLO investor outlook
From electronic trading in the secondary market to growing tranche downgrades, these are “interesting times” for investors in the CLO market. This session will gather together a diverse group of traders and investors to discuss anything and everything that’s on their mind. There are no shortage of issues to choose from, but some of the topics that might make the list include:
- What will issuance look like in 2023?
- How worried should investors be about CLO tranche downgrades?
- Where’s the best relative value at the moment?
- Is electronic trading the future of the CLO secondary market?
Art or science? How technology is transforming CLO investing as well as management
The impact of machine learning on how CLO managers approach portfolio management is frequently covered, but what does that mean for CLO investors? New technologies to accelerate and improve productivity are sweeping into every market, and this panel will explore the myriad impacts of this on direct investors in CLOs.
- How important a factor is machine learning and optimization technology when picking a CLO manager?
- How can investors pick through the tangle of claims about AI to work out whether it’s really making an impact on CLO performance?
- What new tools are available to help structured credit investors themselves?
- What are the biggest remaining time-sinks for investors that technology could solve?
Synthetic alternatives for sophisticated investors
Synthetic alternatives to CLOs like CSOs aren’t for everyone. But the bespoke tranche market had a strong 2022, and for sophisticated investors offers unparalleled flexibility around risk profiles and duration. This panel will bring you up to speed on the latest developments in this growing product class.
- How will CSOs perform over the next twelve months?
- Will the trend for shorter one- or two-year duration continue?
- How do synthetic tranches fit into a portfolio of cash structured credit investments?
- What tools and technology do investors need to approach the assets class?
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