Collateralized Loan Obligation (CLO) Funds Overview

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What is a CLO?

A collateralized loan obligation, or CLO, is a special purpose vehicle that invests in a pool of broadly syndicated or middle market senior secured loans covering a diverse range of issuers and industries. The portfolio of loans is selected by a collateral or CLO manager, who actively buys and sells loans based on their overall attractiveness and diversification. The CLO finances this pool of loans with privately placed rated debt and equity, providing investors with market levels of return. CLO equity returns are driven by the arbitrage or difference between the cost of debt and the yield generated by the pool of loans in the portfolio, net of any gains or losses on the investment loan portfolio.

Why invest in a CLO?
  • Ratings stability
  • Liquidity
  • Higher transparency and disclosure compared to traditional corporate bonds
  • Portfolio diversification
  • Access to high quality investments
Monroe CLO Platform Highlights
  • Monroe has a proven longstanding track record as both a middle market and broadly syndicated CLO manager with the same senior investment team and portfolio manager
  • Monroe has outperformed the market through the recent financial crisis with regards to default and recovery rates
    • Distributed over 25% of net cash-on-cash distributions per annum to investors during the financial crisis in both 2008 and 2009; never missed or diverted a quarterly equity payment
  • Robust originations team provides propriety deal flow
  • Access to broader Monroe origination platform results in proprietary middle market CLO portfolios
  • Established CLO risk retention strategy that complies with regulations in both the U.S. and Europe


Jeremy VanDerMeid
Managing Director, Portfolio Manager – CLO & Loan Trading