Estimated at more than $1.4 trillion, the market for collateralised loan obligations, or CLOs, is poised for continued growth as new publicly traded securities broaden access.
That means CLOs represent new territory for many investors, accentuating the importance of experience, resources and mission-specific expertise when selecting managers.
"Our firm is very unique in terms of our CLO investment capabilities. We've been an investor in this market for decades, and we've also been a CLO issuer since well before the great financial crisis," says PGIM's Edwin Wilches.
PGIM ranks among the world's top 10 CLO managers and top 10 CLO issuers. With scale and reach established over many years, PGIM boasts resources and relationships that position it to play a notable role as the asset class expands. The firm recently introduced the PGIM Global AAA CLO Fund, one of the first truly global funds of its kind.
"What gets us most excited about this fund is the ability to provide clients opportunities they haven't been able to access in the past," says Wilches, who co-leads the firm's securitised products team.
Wilches believes the new PGIM Global AAA CLO Fund is coming to market at an opportune time for investors, many of whom are eager to offset uncertainty with solutions that could help boost income, reduce risk and enhance diversification.
Attributes such as floating rate coupons and credit protection afforded by the CLO structure should also appeal to investors in the current climate. Plus, with tighter spreads in traditional fixed income sectors, the relative opportunity in the CLO space calls out for attention, according to Wilches.
"Right now, in my opinion, is a great time to look at the CLO market," he says. "Arguably, this is one of the best times to look at it."
Read more on why investors should consider CLOs as part of their fixed income allocations in our Focus guide with PGIM, by completing form below.
