Why private debt-backed CLOs merit extra caution
Asset owners in Asia are warming to CLOs blended with direct private lending but will need to tighten the due diligence on their managers as a result, investment experts say.
Collateralised loan obligations (CLO) haven't got the best of reputations due to their role in the global financial crisis, but they've been making a comeback for several years now and in Asia are becoming increasingly popular with yield-starved asset owners.
They're also not considered as risky as they once were.
Even so, buyers should beware of the managers they bestow their trust with, especially if there's private direct lending in the underlying portfolio, investment expert…
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