Pimco Starts Fund to Buy CLO Equity Dumped After `Skin-in-Game'
- Fund targets to include equity pieces shed post-risk retention
- Equity delivered ‘robust returns’ over cycles, firm argues
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Pimco is starting a fund that will buy the riskiest slice of collateralized loan obligations, including those discarded by other managers following the end of U.S. skin-in-the-game rules.
The Pimco CLO Opportunities Strategy fund will buy the equity piece of new issues when valuations for the debt portions are high, while managers will look for both debt and equity tranches on the secondary market during sell-offs, according to people familiar with the matter.