Registration & breakfast
Keynote interview: Navigating the future of CLOs – trends, strategies and opportunities
Hear a seasoned CLO investor discuss the future of the CLO asset class. This keynote interview will provide a comprehensive overview of the current landscape and offer insights into emerging trends, innovative strategies and untapped opportunities. Attendees will gain valuable perspectives on how to adapt their investment approaches to thrive in an evolving market and will leave with actionable insights to enhance their CLO investment portfolios.
Opening panel: The CLO outlook – focusing on European perspectives
The last 18 months proved a challenging backdrop for CLO issuance. Rapid rate hikes and global economic turbulence have made the arbitrage tough. Europe has witnessed a dip in loan issuance prompting investors to seek new ways to attain yield. With reduced M&A activity and ongoing risks in capital flow and supply chains, CLO managers must strategize to safeguard returns. Despite all these headwinds the European CLO market kept up a reasonable pace of issuance across 2023. Looking ahead the market is at a tipping point for transformation. This panel will review:
- How have European CLO managers and investors adapted their approach to cope with the challenging environment of swift rate increases and macro-economic turbulence on CLO issuance and investment strategies?
- How can managers and investors mitigate risks and identify opportunities within the CLO market? What will the impact of Basel III be on CLO investments and capital adequacy, leverage and risk-weighted assets?
- What alternative approaches are managers adopting to improve CLO arbitrage? Will CLO issuance return to higher levels in Europe?
- What is the potential impact of the upcoming maturity wall on the CLO market? What forward-looking strategies can panellists share to proactively navigate the transition?
Panel: Cannibalising CLO collateral? Private credit’s impact on the market
In recent years institutional investors have shifted their attention towards private credit in their hunt for yield and away from the broadly syndicated market. But will the value of liquidity in larger, broadly syndicated markets return as economic conditions continue to deteriorate?How will investors decide where to allocate funds? Panellists will discuss:
- How is increased interest in private credit affecting broadly syndicated markets? Is this trend taking away from BSL issuance?
- How do you decide where to allocate funds when ratings are private? How will privately financed companies perform compared with those with public debt?
- Will banks return to participating in loan securitisations? Have they ridden the storm of ‘big bank stress’?
- How are private equity funds participating in the private credit and BSL markets?
Networking coffee
Panel: CLO managers’ views - managing distress and restructurings
As the market approaches 25/26 loan maturities and refinancing walls draw closer, CLO managers face critical decisions in managing distressed portfolios to avoid par destruction. This panel brings together industry leaders to share their views on navigating troubled names amidst a shifting economic landscape. From managing lender-on lender violence to handling spikes in defaults, panellists will address pivotal questions about addressing these challenges head-on:
- How are CLO portfolios performing, and what are the biggest risks looking forward?
- How are manager’s approaching refinancing walls in an environment of consistently high interest rates?
- How are managers balancing the need to reduce default risk without destroying par value?
- Do CLO documents now give managers sufficient flexibility in distressed situations?
Panel: Navigating Middle Market CLOs – a lasting trend or niche play?
Middle market CLOs saw significant volume in 2023, despite corporate credit markets facing growing interest rates and slowing growth. In the first half of 2023, BSL CLO issuance was down 37%, whilst middle market CLO issuance was up 103% over the same period. Emerging as a dynamic and increasingly significant segment of the structured finance arena, this panel will bring together middle market CLO investors and managers to share insights into origination strategies, risk assessment and investor appetite. Speakers will discuss the unique considerations and opportunities that define middle market CLOs:
- What distinctive differences are there in Middle Market CLOs compared to the BSL market?
- How different are the new generation of private credit CLOs to traditional middle market deals?
- What is demand like from institutional and retail investors?
- Will we ever see another European middle market CLO?
Fireside chat: Insights from a CLO expert
Join us for a fireside chat with a prominent speaker in the CLO market. This session offers a unique opportunity to gain firsthand insights, perspectives and experiences from a seasoned professional with a wealth of knowledge in the field.
Lunch
Panel: The US CLO outlook – transatlantic trends and perspectives
After a surprisingly strong year for new CLOs in 2023 forecasts are mixed for 2024. Some believe that US primary market activity will be patchy, with investors less willing to deploy capital following broader market volatility in rates and concerns about liquidity. But others point to continuing strong performance of existing CLOs as increasing attractive. This panel delves into the landscape of the US CLO market exploring the latest trends, regulatory shifts and the nuanced distinctions between US and European CLO markets. Panellists will discuss:
- How will the primary market perform for the rest of the year? Will issuance return to 2021 levels or stay subdued?
- What are the key distinctions between the US and European CLO markets including deal structures, investor base and regulatory landscapes?
- How will new regulations for both banks and insurance firms impact CLO structuring and management in the US? How can managers align CLO structures with new regulatory frameworks?
- Is the 2022 reset wave played out? What vintages should we expect to reset or refinance next?
Fireside chat: Allocating to CLOs – fundraising and capital sources
Challenging market dynamics and limited loan volumes have led LPs to diversify investment pools and to enter competitive alternatives with attractive yields. In the ‘golden era’ of private credit, new structured credit funds are experiencing tough fundraising conditions, whilst established names are benefiting from long-standing relationships with LPs. However, emerging trends including the entrance of more family offices to the market and the increase of retail friendly products could impact future dynamics. This panel will discuss:
- What is the current fundraising climate? What alternative sources of capital are there for new CLO funds?
- What are LPs looking for in a fund manager?
- Are CLO ETFs and other high liquidity structures useful for LPs investors or a distraction from longer term investments? Are ESG considerations still an important factor when LPs consider allocations to CLO funds?
Fireside chat: CLO documentation – snooze, drag, inconsistencies and nuances
This session will bring together experts intimately familiar with CLO documentation to shed light on critical strategies, potential inconsistencies and nuanced adjustments that occur to both pre and post investment periods. From snooze and drag provisions to addressing documentation discrepancies, panellists will provide insights on CLO documentation and structuring. Speakers will discuss:
- Are snooze and drag provisions providing flexibility for CLO managers, or breaching the trust of note-holders?
- How is par flush language implemented in documentation? What are the impacts of this?
- What are the key considerations in structuring CLO documentation to protect against restructurings?
- How can managers and investors alike successfully adapt CLO documentation to changing market conditions and investment landscapes?
Networking coffee
Panel: Higher for longer rates – would you buy it?
In a ‘higher for longer’ rate environment, top CLO investors talk through their investment process as they consider CLO investment case studies. From risk assessment to yield expectations and relative value to manager due diligence, what are the key questions every CLO investor should ask before they buy? Case studies will include:
- Primary versus secondary CLOs?
- US versus Europe?
- Mezzanine versus equity?
- Broadly syndicated versus middle market?
Panel: CLO secondary market – thriving or surviving?
The dynamics of the secondary market have been evolving in response to a multitude of economic and regulatory factors. This panel assembles industry experts to dissect the current state of the CLO secondary market and to deliberate on whether it’s thriving in the face of challenges or merely surviving. From liquidity trends to investor appetite, panellists will provide insights into the resilience and potential opportunities within this segment of the structured finance landscape. Panellists will discuss:
- What is the current level of liquidity and trading activity in the CLO secondary market? How have market conditions impacted the ease of buying and selling CLO securities?
- How have spread movements and pricing trends been affected in the secondary market? What is demand like and how is this driving pricing?
- Is the secondary market getting manager tiering right?
- Are new electronic trading platforms taking off? What are the roadblocks to a development that most investors have repeatedly asked for?
Creditflux CLO Manager Awards
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