CLO Equity Strategy

Does anyone have information on investing in the equity tranches of top CLO managers? It seems like this is a pretty advantageous strategy with potential for 15%+ IRR. Quarterly cash flows unlike PE and significantly less volatility than public equity. Not sure what I might be missing but basing it off an eagle point article I read.

3 Comments
 
I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

youre the most junior piece of debt, equivalent to taking 10x leverage. assuming you get paid great, have your 15-20%, if things dont work out, its very possible to lose your shirt. 

i would say you need to get the macro right and clo equity can be a great place to be (if economy expanding and monetary policy easing)

 

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