CLO Buyers Prepare New Funds to Scoop Up Beaten Down Bonds
- Napier Park, Neuberger Berman among firms raising new vehicles
- Funds will focus on finding value in BBB and BB CLO slices
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Collateralized loan obligation investors including Napier Park Global Capital and Neuberger Berman are preparing new funds specifically designed to buy struggling CLO securities, according to people with knowledge of the matter.
The so-called credit opportunity funds will target beaten down BBB and BB rated slices, said the people, who asked not to be identified because the details are private. Both will focus on tranches with high-quality loans that while likely to be volatile in the near-to-medium term, have the potential to never suffer principal losses.