AXA IM launches new CLO fund

AXA Investment Managers (AXA IM) has launched a new fund investing in mezzanine debt tranches of collateralised loan obligations (CLOs), the AXA IM CLO Credit Fund.

The fund will aim to generate 6-8% net returns with annual volatility of 3-5%, with an investment grade average rating. AXA IM said that the current spreads in CLO are attractive to investors, giving access to alternative credit strategies but with some liquidity. It added that CLO debt tranches have survived various market cycles including the 2008 financial crisis. AXA IM co-head of securitised and structured assets, Christophe Fritsch, said: “We believe that CLO tranches represent a significant market opportunity currently relative to traditional credit instruments. This is due to the considerable widening in CLO spreads driven by the macroeconomic environment, especially the decline in oil price, as well as some recent forced selling by hedge funds. We’ve already seen significant client interest in the fund with a more than 50 million dollar investment from our first investor and we expect to see further interest from pension funds and family offices primarily across Switzerland, Germany and the Nordics.”

The fund will be domiciled in Luxembourg and will have monthly liquidity. It will be available for investors in Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, Sweden, Switzerland, the Netherlands and the UK.