RBC Is Launching a Public Debt Fund as Retail Investors Flee Private Credit

As retail investors pull cash from private credit, Royal Bank of Canada’s asset management division is offering a risky, public market alternative: a fund for CLO equity.

RBC Global Asset Management is planning to launch its first interval fund to invest in the riskiest slices of corporate loan pools known as collateralized loan obligations, according to portfolio manager Mark Shohet. The vehicle — a type of fund with scheduled exits — will mostly buy US CLO equity, with future flexibility to invest in junior CLO debt, European CLOs and other structured credits.