There’s a misconception that the CLO market is heavily skewed towards a particular sector or region, concentrating risk. Portfolio Managers Denis Struc and Ian Bettney challenge this myth and demonstrate that its composition is actually advantageous.
A myth surrounding the securitised sector is that risk is ‘concentrated’ and ‘opaque’. Often, this is because when investors hear the word “securitised”, they have a cloudy memory of the Global Financial Crisis and link to subprime mortgages. Fast forward to today and the world is a very different place. In our ‘Fact versus Fiction’ series, we have sought to bust many of the myths around securitised debt and here we look at the diversity within the asset class, focusing on its biggest sub-sector, collateralised loan obligations or CLOs.
