Structured Credit continues to offer compelling returns, through the potential for capital appreciation and regular income.
Alcentra limits its activities in the structured credit markets to those instruments that are based on portfolios of sub-investment grade corporate debt.
Collateralised Loan Obligations (“CLOs”) are tranches of debt securities backed by senior Secured Loans to U.S. and European corporates.
Following the last economic crisis, prices of CLO securities fell substantially, and have recovered more slowly than other fixed income asset classes including the loan portfolios on which they are based. As a result, Structured Credit can provide a cheap way to access the underlying loan portfolios.
Alcentra targets the mezzanine and equity tranches where we have identified the highest opportunity for capital appreciation and income.
Key to maximising income in this asset class is to understand the underlying assets, and minimise the risk of defaults.