PGIM Introduces a Worldwide Collateralized Loan Obligation Fund
PGIM Launches UCITS-Compliant Global AAA CLO Fund
PGIM, a global asset management business of Prudential Financial Inc, has announced the launch of a new UCITS-compliant Global AAA CLO Fund. This fund aims to provide access to a broader set of clients who have historically had less access to collateralized loan obligations (CLOs), an asset type that has traditionally been limited to institutional investors.
The fund focuses on high-quality, yield-enhancing fixed income strategies, specifically investing in senior debt tranches rated AAA of US and European CLOs. It also has the flexibility to invest up to 20% of its assets in AA-rated debt tranches, enhancing its yield potential.
The fund's launch marks a significant shift in how investors in Europe, Middle East, and Africa (EMEA) regions are allocating to CLOs within regulated fund frameworks. It offers access to the CLO market to intermediaries, the wealth channel, and institutional investors.
The fund's registration in multiple countries, including the UK, Italy (retail), and Switzerland (pending regulatory approval), suggests an effort to cater to a global client base. Beyond institutional investors, the fund specifically offers access to a broader investor base, expanding availability to retail and wealth management channels.
The fund is classified as an Article 8 fund under the Sustainable Finance Disclosure Regulation (SFDR), reflecting PGIM's commitment to sustainable investing.
With an initial capital of $25 million from PGIM, the fund complements PGIM's extensive $77 billion CLO platform, aligning with their long-term growth goals. This launch is part of PGIM's strategy to expand its presence in the global CLO market.
The fund leverages PGIM's expertise as a top-10 CLO manager globally, managing $145 billion in securitized products including CLOs, backed by over 15 years of CLO investment management experience. Key features and benefits include the focus on high-quality, senior CLO tranches, access through the UCITS fund structure, and the ability to invest in AA-rated tranches to enhance yield potential.
The fund's registration in Italy (institutional) and Spain indicates an intent to serve institutional investors in these regions. It is registered for sale in Luxembourg, the Netherlands, Denmark, Norway, Finland, France, Italy (institutional), Spain, Germany, Sweden, and as a restricted scheme in Singapore.
The fund's focus on high-quality, yield-enhancing fixed income strategies caters to rising investor confidence and appetite. It is expected to suit investors who seek income opportunities within a well-defined regulatory framework.
[1] Source: PGIM Press Release [4] Source: PGIM Fixed Income Securitized Products Team website
- The launch of PGIM's UCITS-compliant Global AAA CLO Fund signifies a move towards increased regulation in asset management, as it offers access to a broader investor base, including retail and wealth management channels, while adhering to the Sustainable Finance Disclosure Regulation.
- In the realm of finance, PGIM's new fund focuses on high-quality, yield-enhancing fixed income strategies, such as investments in senior debt tranches of US and European CLOs, with flexibility to invest up to 20% in AA-rated debt tranches, aiming to provide income opportunities within a well-defined regulatory framework.
