As any entrepreneur, boss or parent can attest, the key to avoiding disappointment is managing expectations. Got a B student at home? Expect a C, and when he walks in the door with an A, voila! Happy days!

This philosophy worked well for CLO market watchers in 2011, a year when volume landed comfortably within the typical analyst forecast of $10 billion to $15 billion—just over $12 billion in the end — despite a roller coaster ride of a year that saw issuance crank up early on, only to sputter in March, regain steam heading into the summer, then plummet again in August. As one CLO manager put it, “We were pretty happy that, despite the volatility in Europe, deals got done at all. It worked out better than we thought it would in September.”

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