9Questions — Ujjaval Desai, Sound Point — 2023 primary CLO equity was attractive
- Michelle D'Souza
The US CLO market is off to a record start to the year with $46.1bn issuance year-to-date, according to 9fin data. In fact, February new issue supply at $20.2bn marked the second busiest month in the history of the CLO market (Nov 2021 at $25.6bn), according to JP Morgan CLO research. Both Bank of America and JPM have revised their 2024 forecasts upwards.
And with arbitrage slowly improving, CLO equity investors are trickling back into the primary market. Sound Point Capital however was one of the few investors that invested throughout last year.
9fin spoke to Ujjaval Desai, head of structured products investing at the firm, on the rationale for this, how institutional investors can access CLO equity and the rise of ETFs and listed funds, opening up the asset class for retail investors.