The ranks of collateralized loan obligation managers are widely expected to shrink when risk retention rules take effect in 2016; a number of smaller firms lacking the capital to hold on to 5% of their deals will sell themselves or wind their businesses down, the thinking goes.

John Lapham, co-head of leveraged finance at PineBridge Investments, a New York-based asset management firm with 22 CLOs under its belt, thinks the shakeout could come even sooner.  That’s because smaller managers are likely to have a hard time marketing new deals, even now, if investors are worried that the business isn’t growing and so may not be able to attract the people and resources necessary to run it well.

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