Sculptor Capital Closes $408M CLO, Enhancing $13B Credit Portfolio
Sculptor Capital Management, Inc. has successfully closed Sculptor CLO XXXV (Sculptor CLO 35), a $408 Million Collateral Loan Obligation (CLO) transaction. This achievement elevates Sculptor’s management portfolio to 34 clos and CBOs, totaling approximately $13 Billion across both the U.S. and Europe. This significant move underscores Sculptor’s robust position in the global credit market.
Details of Sculptor CLO 35
Sculptor CLO 35 is backed by a nearly fully ramped $400 Million portfolio, primarily composed of senior secured loans. The CLO features a five-year reinvestment period and a two-year non-call period. BNP Paribas arranged the transaction, attracting strong demand for its debt and equity tranches from a diverse array of prominent global institutions.
Josh Eisenberger, Executive Managing director and Head of U.S. CLO Management at Sculptor, emphasized the company’s long track record of managing CLOs through various credit cycles. He credited investor support and the extensive experience of the Institutional Credit Strategies (ICS) business for this success. Eisenberger noted that the execution of CLO 35, despite challenging market conditions, demonstrates the resilience of Sculptor’s credit platform and the strong momentum and performance observed over the last 18 months.
Sculptor’s Expanding Credit Portfolio
since 2012,Sculptor has issued 46 CLOs and CBOs across the U.S. and Europe. As of March 1,2024,the firm manages $23 Billion in global credit assets,encompassing corporate,asset-based,and real estate credit strategies. this diversified approach positions Sculptor as a significant player in the global credit landscape. Pro tip: diversification is key in managing risk in volatile credit markets.
Key Facts About sculptor’s CLO Management
| Metric | Value |
|---|---|
| total CLOs and CBOs Managed | 34 |
| Total Assets Under Management (CLOs/CBOs) | $13 Billion |
| Total Global Credit Assets Managed | $23 Billion |
| CLOs and CBOs Issued Since 2012 | 46 |
The successful closing of Sculptor CLO 35 highlights the continued investor confidence in Sculptor’s credit management capabilities and its strategic approach to navigating complex market dynamics. Did You Know? CLOs are often seen as barometers of the overall health of the credit market.
Understanding Collateral Loan Obligations (CLOs)
Collateral Loan Obligations (CLOs) are a type of structured credit product where payments from multiple middle-sized and large business loans are pooled together and passed on to different classes of owners in various tranches. These tranches vary in risk, offering investors choices based on their risk tolerance. Senior tranches are generally safer, while junior tranches offer higher potential returns with increased risk.
The CLO market has grown substantially over the past decade, becoming a critical component of the leveraged loan market. According to a report by S&P Global Ratings in early 2024, global CLO issuance remained strong, supported by robust investor demand and a relatively stable economic environment. Though, factors such as rising interest rates and geopolitical uncertainties can introduce volatility into the CLO market.
Recent Trends in CLO Management
- Increased regulatory Scrutiny: Regulators worldwide are increasing their oversight of CLOs to ensure they are managed prudently and do not pose systemic risks to the financial system.
- Focus on ESG Factors: There is a growing emphasis on incorporating Environmental, Social, and Governance (ESG) factors into CLO investments. Investors are increasingly seeking CLOs that align with their sustainability goals.
- Technological Advancements: CLO managers are leveraging advanced analytics and artificial intelligence to improve risk assessment and portfolio management.
Frequently Asked Questions About collateral Loan Obligations
What are your thoughts on Sculptor’s latest CLO closing and its impact on the credit market? Share your insights in the comments below.
