Collateralized Loan Obligations

Bowl of Cherries
David Bates
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About Collateralized Loan Obligations

The Barrow Hanley CLO platform, managed by a team with experience investing through multiple market cycles, utilizes the full breadth of the firm’s fundamental research capabilities to identify companies and credits that they believe will generate attractive risk adjusted returns for all stakeholders within a CLO structure.

Investment Process

Investment Objective:

Seek to originate and manage CLOs in order to provide attractive risk-adjusted returns.

Investment Overview:

We believe that CLOs provide attractive yield and returns for investors. CLOs are durable and stable investments when managed properly, as demonstrated through multiple market cycles. Our deep experience, access to firm resources, and our fundamental credit analysis process all portend a team that is focused on optimizing risk-adjusted returns within the risk mitigating constraints of the liabilities.

CLO ASSETS
Investments in a diversified pool of bank loans (150-200) positions
  • Floating Rate
  • Senior Secured
  • Rated BB and B
  • 5-7 year maturities
  • 1/3 of portfolio pre-pays on average annually
  • Actively managed
CLO assets & liabilities are matched; floating rates with similar maturity profiles
CLO LIABILITIES
CLO debt financing = ~90% of CLO assets
  • Floating Rate
  • Rated AAA-BB
  • 10 year, non-recourse debt
  • Not subject to margin calls
CLO EQUITY
~10% of CLO assets
  • Equity earns the yield on bank loans less the costs of CLO debt financing and fees

Strategy Summary

as of 9/30/2021
Asset Class
Broadly Syndicated Bank Loan CLO
Investment Style
Bottom-Up Security Selection
CLO Equity Fund I
Currently Fundraising
Total CLO Assets
TBD

For more information on CLOs, please reach out to Alexander Grause, Portfolio Specialist, at agrause@barrowhanley.com

Disclosure

Sources for data noted above are from APX, Credit Suisse and Bloomberg Index Services Limited as of the date specified.

Barrow Hanley gross returns are shown before investment management fees and custody expenses. Index returns do not reflect transaction costs, management fees, and other expenses. Performance is expressed in U.S. currency. Net returns are calculated using a model fee. The model fee is based on the highest tier of our standard fee schedule. Barrow, Hanley, Mewhinney & Strauss, LLC claims compliance with the Global Investment Performance Standards (GIPS®).

Credit Suisse Index data is permissible for use by Barrow Hanley for client reporting and marketing purposes.  This data is not permitted to be re-distributed.

All institutional product information has been provided by Barrow, Hanley, Mewhinney & Strauss, LLC. Any questions about this material or requests for additional information may be made directly to the firm by contacting us here.

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