As pricing finally begins to rise on institutional loans, CLO managers are frenetically scrambling to issue larger funds in order to invest in and take advantage of these juicier spreads. Jumping on board with one such new fund is The Carlyle Group, which announced the close of its eighth US high yield fund, Carlyle High Yield Partners VIII (CHYP VIII), last Wednesday. The new $525 million fund, which utilizes a traditional CLO structure, will invest a minimum of 95% of its assets in bank loans with a maximum of 5% in high yield bonds. Carlyle's leveraged finance group now manages $5.6 billion in assets.
Carlyle combined assets from a previous CLO at the end of its reinvestment period to seed funding for CHYP VIII, and rounded it out with new assets from the loan market, noted Linda Pace, Carlyle managing director and leveraged loan portfolio manager.