Alcentra, a European-based alternative credit manager and part of Franklin Templeton, says it has secured $1 billion in equity capital committed to its strategies focused on collateralized loan obligations (CLOs).
The proceeds will be allocated mostly to the mezzanine and equity tranches of CLOs, through Alcentra's third-party CLO tranche investing platform, according to a company statement.
Because the mezzanine and equity pieces typically represent approximately 30% of total CLO issuances, $1 billion can go a long way. With that amount of fire power, Alcentra hopes to meet the growing t demand for CLOs in Europe, where the market totaled nearly €40 billion ($42 billion) last year, up from €26 billion the year before.
"We have seen a resurgence in the popularity of CLOs among major institutional investors over the past six months," according to a statement from Cathy Bevan, head of structured credit and portfolio management at Alcentra.
Alcentra is forming a second captive European CLO equity fund, contributing to about $4 billion of assets under management (AUM) in European CLOs in the next three years, according to Alcentra's statement. The alternative credit manager currently has $18 million across European loans, European CLO issuance and global third-party CLO tranches, according to the company statement.
