In the clubby world of smaller middle-market lending, CLO managers are having a hard time obtaining creme-de-la-creme middle market collateral. That is, unless you are able to obtain a member's only jacket in the form of an origination platform. In fact, the majority of MM CLO managers going forward are expected to be seen as part of a specialty manager or orgination platform.

"It is a matter of reciprocity," said Alla Zaydman, a director at Fitch Ratings. "To get deal flow, you have to give deal flow." The growth of middle market investing has led to spread tightening in the broader middle market loan sector, along with shifting underwriting standards. The development is leading certain players to look for ways to get a foot in the door of the more lucrative, smaller middle market lending, market participants say.

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