Pensions & Investments: Prime Time for CLOs

Jim Stehli, co-Lead of Polen Capital's CLO platform, recently sat down with Pensions & Investments to discuss the CLO asset class and the benefits that it offers to investors.

Highlights:

• Jim discusses how CLOs, which have become the largest securitized asset class in recent years, have been tested through various market cycles. He believes investors should consider including allocations to both CLO debt and CLO equity as part of a balanced alternatives portfolio.
• Jim describes how an investment throughout the CLO capital stack offers investors diversification on an underlying pool of leveraged loans, thereby providing an element of downside protection. 
• Furthermore, Jim advocates that an investment in triple-A-rated CLOs can provide a fair return with significant downside protection.
• Jim believes a disciplined investment process can translate into performance. In his view, CLO portfolios that are thoughtfully constructed on day one and then continuously underwritten throughout the CLO lifecycle tend to perform better. Accordingly, Polen’s approach is to construct a balanced portfolio that provides a healthy level of diversification while avoiding overreaching.

Read the Pensions & Investments article