Collateralised Loan Obligations (“CLOs”)
Pemberton’s CLO strategy invests in publicly rated, broadly syndicated leveraged loans, which are typically used to fund sponsor driven or corporate M&A activity.
Such loans are originated by major arranging banks and held by various market participants. As a result, they are also liquid with an active secondary market. CLOs have proven to be resilient investment vehicles through multiple cycles delivering attractive risk adjusted returns to note holders.
CLOs are a compelling investment for the following reasons:
- Diversified portfolios
- Choice of rated notes
- Credit enhancement
- Additional liquidity
- Strong relative value
- Low correlation
- Current yield
- Contractual returns
- Floating rate
- Low duration risk
- Limited migration
- Regular reporting
- Full transparency
Pemberton’s CLO investment philosophy is predicated on the construction of highly diversified credit portfolios utilising a 3D approach focusing on fundamental analysis techniques and adopting a relative value approach for portfolio optimisation purposes. The platform aggregates the benefits of being part of a large institution with the agility of a boutique manager. Pemberton closed its first CLO (Indigo Credit Management I DAC) in November 2023. The ambition is to launch up to 2 CLOs per year.
CLOs complement Pemberton’s Direct Lending and Working Capital Finance strategies, offering investors access to a further credit product to suit their investment and allocation needs.
Consistent with Pemberton’s ethical principles, Pemberton’s CLOs incorporate the latest thinking in sustainable investment policies and are built into investment decision making. It also benefits from the appointment of a specialist Independent Sustainability Co-ordinator.
The strategy is headed by Dr Rob Reynolds.
