Collateralized Loan Obligation Market Report 2024

This Collateralized Loan Obligation industry report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market’s historic and forecast market growth by geography.

The collateralized loan obligation market size has grown rapidly in recent years. It will grow from $1.24 trillion in 2023 to $1.41 trillion in 2024 at a compound annual growth rate (CAGR) of 13.9%. The growth during the historic period can be attributed to a rising interest in sustainable investments, an increase in potential trading partners, a growth in trace trading, and a higher demand for alternative investment products.

The collateralized loan obligation market size is expected to see rapid growth in the next few years. It will grow to $2.38 trillion in 2028 at a compound annual growth rate (CAGR) of 14%. The anticipated growth in the forecast period can be attributed to increasing demand for governance-compliant collateralized loan obligations, expanding leveraged loan markets, growing private debt, a rise in trace trading, and an increase in foreign exchange trading volumes. Key trends expected during this period include innovative technologies, advancements in CLO structures, developments in blockchain and machine learning, the introduction of technologically advanced products, and the evolution of regulatory compliance tools.

The growing interest in high-yield investments is anticipated to drive the expansion of the collateralized loan obligation (CLO) market. High-yield investments offer potentially higher returns compared to traditional investments, often accompanied by greater risk. This increased demand is driven by factors such as low interest rates on conventional savings, investors seeking higher returns, and economic conditions favoring riskier investments for potentially larger rewards. High-yield investments contribute to the appeal of collateralized loan obligations by enhancing returns, boosting cash flow, and providing diversification, which improves the overall performance and risk-return profile of CLOs. For example, the Bureau of Economic Analysis reported in July 2023 that foreign direct investment (FDI) in the United States grew by $216.8 billion, reaching $5.25 trillion by the end of 2022, up from $5.04 trillion in 2021. This rising demand for high-yield investments is fueling the growth of the CLO market.

Key players in the CLO market are focusing on creating innovative CLO structures, such as exchange-traded funds (ETFs), to better manage risk-return profiles and address evolving market demands and investment strategies. ETFs are investment funds that offer diversified exposure to portfolios of CLOs, which are structured credit products made up of pooled corporate loans. For example, in July 2023, Panagram Structured Asset Management, LLC, a US-based investment advisor, launched two actively managed CLO ETFs, the Panagram AAA CLO ETF (CLOX) and the Panagram BBB-B CLO ETF (CLOZ). CLOX focuses on AAA and AA-rated CLO bonds, aiming for capital preservation and consistent monthly income with a 0.20% expense ratio. In contrast, CLOZ targets BBB and BB-rated CLO bonds, seeking higher yields while also emphasizing capital preservation, and features a 0.50% expense ratio.

In April 2024, Generali Investments Holding SpA, an Italy-based insurance firm, acquired Conning Holdings Limited for an undisclosed amount. This acquisition is part of Generali Group's strategy to increase its total assets under management, enhance its position as one of Europe's top 10 asset managers, and expand its global investment expertise in insurance and institutional fixed income. Conning Holdings Limited is a US-based investment management firm specializing in investment-grade-rated debt securities for CLOs.

Major companies operating in the collateralized loan obligation market are JPMorgan Chase & Co., Wells Fargo & Company, Citigroup Inc., Prudential Financial Inc., Morgan Stanley, BNP Paribas S.A., Mitsubishi UFJ Financial Group Inc., Deutsche Bank AG, Barclays PLC, BlackRock Inc., Credit Suisse Group AG, Blackstone Inc., Jefferies Financial Group Inc., Ares Management Corporation, Neuberger Berman Group LLC, RBC Capital Markets LLC, Natixis S.A., HPS Investment Partners LLC, Conning Inc., CIFC Asset Management LLC, Brigade Capital Management LP, GreensLedge Capital Markets LLC, Panagram Structured Asset Management LLC.

North America was the largest region in the collateralized loan obligation market in 2023. The regions covered in the collateralized loan obligation market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the collateralized loan obligation market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

A collateralized loan obligation (CLO) is a financial instrument backed by a pool of corporate loans, typically to companies with lower credit ratings. CLOs are structured into different tranches, each with varying levels of risk and return, allowing investors to select investments based on their risk tolerance and return objectives.

The main types of collateralized loan obligations include investment grade, non-investment grade, and equity investment grade. Investment grade CLOs are securities deemed to have a lower risk of default by credit rating agencies. These CLOs are further segmented by investor base into categories such as banks, asset managers, insurance companies and pensions, hedge funds, and others. They serve various sectors including technology, healthcare, services, financials, industrials, housing, food and beverages, paper and packaging, transportation, and others.

The collateralized loan obligation market research report is one of a series of new reports that provides collateralized loan obligation market statistics, including collateralized loan obligation industry global market size, regional shares, competitors with a collateralized loan obligation market share, detailed collateralized loan obligation market segments, market trends and opportunities, and any further data you may need to thrive in the collateralized loan obligation industry. This collateralized loan obligation market research report delivers a complete perspective on everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The collateralized loan obligation market includes revenues earned by entities by providing services such as pooling of loans, trading, issuance of securities, structured investment, active management, and income generation. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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