The fund specializes in investments in collateralized loan obligations (CLOs), securities backed by a pool of senior secured corporate loans (provided by financial institutions to companies that operate in various sectors) that deliver a predefined cash flow. The fund invests in the debt and equity tranches of CLOs, which are managed by financial institutions in the primary and secondary markets in the US, and in warehouses established by top-tier organizations in the CLO industry, according to different strategies.
The CLO market achieved a surplus yield over the traditional corporate bond market (according to historical data), while according to the global rating agencies’ data, the total rate of default in the various CLO tranches is lower compared to corporate bonds with the same rating.
The fact that the CLO instruments are backed by loans with variable interest rates provides these instruments with an advantage in a rising interest rate environment.
To enable qualified Israeli investors access to the CLO market as an alternative to the traditional corporate bond market.
