KBRA Releases Research – European CLO Manager Style Comparisons: March 2025 Update

LONDON--(BUSINESS WIRE)--Collateralised loan obligation (CLO) manager styles or approaches to investing in a pool of leveraged loans can vary significantly across managers. In the end, investors are best positioned to determine which manager’s approach best suits their needs. As part of KBRA’s series examining European CLO manager styles, this report provides an update to our April 2024 analysis, highlighting changes since our last publication and focusing on the differences between CLO managers when evaluated across selected cross-metrics. The governing classifications are Opportunistic and Conservative; however, these classifications are not intended to imply any positive or negative sentiment. Rather, they are used solely for information purposes to display and distribute the data.

Key Takeaways

Turnover among manager rankings has remained elevated over the past 11 months, with five managers from the previous update retaining their positions in the top 10 most opportunistic group. Among the new entrants, CIFC, Arini, and Accunia each moved up more than 17 positions in the rankings. Notably, Accunia advanced 27 spots, driven primarily by a relatively higher weighted average spread (WAS) and greater percentage of assets rated CCC or lower.
Three managers—Redding Ridge, Fair Oaks, and M&G—have retained their stance in our most conservatively leaning manager list since April 2024, with Redding Ridge consistently appearing in the top 10 since June 2022.
Among the seven new entrants to the conservative cohort, Bridgepoint and Blue Ray—previously part of the most opportunistic leaning group—each migrated over 50 positions towards the conservative end. We observe that the shift in both managers’ rankings was fuelled by a relatively lower WAS, equity yield, and KBRA weighted average rating factor (K-WARF).
With moderately leaning managers typically subject to greater ranking volatility due to their mid-range positioning, only Permira remained in the most balanced group compared to our last update. Among the new entrants, King Street migrated from the opportunistic leaning cohort, due to a comparatively lower WA equity yield and higher percentage of senior secured loans. Conversely, MV Credit, Ostrum, and CQS, shifted from the most conservative group, with MV Credit and Ostrum showing relatively higher K-WARF and WAS, while CQS exhibited an increase in WA equity yield and leverage.

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