Neil Servis and Hassan Jeraj interviewed in Institutional Asset Manager’s Alpha Q June 2015 Edition
Mousetraps and the art of generating alpha
James Williams interviews structured credit specialists Serone Capital.
May was the tenth consecutive month in Europe for issuance of collateralised loan obligations (CLOs) – and as IFRAsia reported on 13th May, that is the longest period of CLO issuance since the global financial crisis.
CLOs are structured credit vehicles that pool together mainly leveraged loans and slice them into different tranches of risk, producing a range of bonds that are typically investment grade and take the form of floating rate notes.
According to Credit Suisse, CLO volumes could reach between EUR17 billion and EUR20 billion in 2015. This is on the back of approximately EUR8.9 billion of CLO paper issued in 2013, whilst in 2014 some 35 issues originated in Europe for a combined total of EUR14.5 billion. That is still some way off the EUR80.5 billion in European CDO and CLO issuance pre-crisis but the key point is that the primary market is swinging back up.
This augurs well for structured credit specialists who invest and trade in CDO and CLO securities, one of which is London based Serone Capital, whose Serone Key Opportunities Fund launched on 24th February, 2012.
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