CLOs at the center of the new PE industry

Colateralized Loan Obligations are becoming increasingly popular in the post-crisis era by enabling high yield investing at reduced risk levels. The beauty of the CLO is its malleability: like a bespoke suit, risk/return can be tailored for the squeamish or the aggressive investor. In this article, we explore the characteristics of this peculiar form of structured credit to discover the reasons for its surge and how these CLOs are used in the PE industry.