{"id":18754,"date":"2026-05-21T14:00:52","date_gmt":"2026-05-21T14:00:52","guid":{"rendered":"https:\/\/www.europesays.com\/germany\/18754\/"},"modified":"2026-05-21T14:00:52","modified_gmt":"2026-05-21T14:00:52","slug":"clos-above-the-turbulence-deutsche-bank","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/germany\/18754\/","title":{"rendered":"CLOs: above the turbulence \u2013 Deutsche Bank"},"content":{"rendered":"

Our earlier flow analyses noted the influx of new CLO managers entering the European market, whether from the US or CLO-adjacent spaces<\/a>. New entrants, both those entering organically or through acquisition, might need fewer assets and managers to launch than their US peers, but they also will have to compete harder given the current dearth of supply.<\/p>\n

\u201cPerformance is important: debut managers stick to more balanced and defensive portfolio construction, but unannounced \u2018style drift\u2019 by existing managers can negatively impact performance and future fundraising\u201d noted Paul Roos, Partner and Head of Structured Credit at Whitebox Advisors. With around 70 managers already in Europe (and an anticipated 10 to 20 new ones over the coming year), some consolidation is likely. But, he added, today\u2019s challenging environment allows great managers \u2013 both seasoned and new \u2013 to shine. Leveraged loans might not be in plentiful supply, but buyers remain discerning and create a \u2018credit-pickers\u2019 market\u2019.<\/p>\n

Overall, \u201cunderlying assets have been resilient\u201d, said Brendan Condon, Head of European CLO Structuring at Deutsche Bank. Collateral performance in the private credit\/mid-market (PC\/MM) space has held up well too. \u201cThere have been no big blow-ups within CLOs, although this could be due to the usual delays in quarterly reporting and more generally due to the market going through \u2018a price-discovery phase\u2019,\u201d added Kieran Page, Head of Structured Credit & Mortgages at Legal & General Institutional Retirement.\u00a0<\/p>\n

Given credit committee concerns, some banks are reportedly focusing on existing borrowers. Such lender-borrower familiarity is helpful, but already commonplace in PC\/MM, where more direct dialogue helps underwriting, reporting and, occasionally, work-outs, reported panellists. Lender caution and adaptation of legal structures and documentation aside, funding for the PC\/MM space is available but more limited \u2013 and over the past five years, BSL has disappointed compared to PC\/MM.<\/p>\n

Panellists concluded that the CLO market has been so resilient due to four key factors:<\/p>\n

The calibre of CLOs\u2019 underlying collateral: in 25 years of returns for European LBO loans, only 2008 and 2022 had negative performances.
\nThe calibre of CLO managers: although after such a historically benign environment, there is evidence of more variance in European manager results. This will lead to some \u2018tiering\u2019, or further delineation of CLO managers according to their experience, assets managed, and performance \u2013 and thus their fees and spreads commanded when pricing.
\n\u2018Captives\u2019 (whereby an investor signs up for several deals with one particular CLO manager) provide a pipeline of demand. Investors clearly favour the access to deals captives provide, their returns, and other features, otherwise there would not be new ones appearing constantly.
\nThe overall structure of CLOs: they are \u2018like a bank but an inverse one, with locked-in funding for 12 years up-front\u2019. Specifically, their structure enables investors to choose their ideal instrument: for some, buying senior secured debt issued by well-performing corporates at just shy of par in the mid-90s is a \u2018screaming buy\u2019 that generates attractive income. For others preferring the other of the capital stack, buying at a deep discount and capturing the pull-to-par can also appeal.<\/p>\n

Given these four factors, the CLO success story should continue, and weather the current turbulence.<\/p>\n

The\u00a0Creditflux CLO Symposium 2026<\/a> took place from 20\u201321 April 2026 in London<\/p>\n

For further information on how to access Deutsche Bank\u2019s collateralised loan obligation services please visit our solutions page\u00a0here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Our earlier flow analyses noted the influx of new CLO managers entering the European market, whether from the…\n","protected":false},"author":2,"featured_media":18755,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21213],"tags":[22244,22242,22246,7864,21214,22243,22245,22241],"class_list":["post-18754","post","type-post","status-publish","format-standard","has-post-thumbnail","category-deutsche-bank","tag-bsl","tag-clos-collateralised-loan-obligations","tag-collateral","tag-debt","tag-deutsche-bank","tag-lbo","tag-portfolio","tag-structured-finance"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/18754","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/comments?post=18754"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/18754\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media\/18755"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media?parent=18754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/categories?post=18754"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/tags?post=18754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}