Debt securitization / CLO

Hi,

I understand credit funds make money off the flat fee + interest margin charged to the borrowers (plus warrants etc). I noticed some of these debt funds also have CLO funds in which they securitize some of the loans sitting on their books. How do they make money off this?

Is it just a way for the credit fund to manage liquidity by getting its principal back earlier while giving up a large % of the IR to the CLO investors but still clocking some management fees?

Am I missing something?

Thanks

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Debt securitization / CLO

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