A One-Stop Shop for investing in Collateralized Loan Obligation

We invest in selected CLOs. With a professional team of more than 18 years of experience, we provide access to a highly specialized credit market for our private investors.

About Us
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Introduction to clo

About Us

clo funding

Our Expertise

  • Access to a highly specialized credit market: The CLOs market is usually reserved for institutional investors and banks; Avenida allows private investors to be part of it.
  • Close relationships to the most important US CLOs managers: we have direct access to the high management of the best US CLOs managers.
  • Higher yield than comparable investments: Collateral Loan Obligation’s returns are historically higher than High Yield bonds with lower risk.
  • Proven track record: The average realized cash on cash IRR of redeemed CLOs is 16.31% of the 75 new issue transactions selected in the past 17 years.
  • High diversification: Every single CLO is actively managed and invests in around 200-300 different loans. Avenida’s fund underlying portfolio of loans includes more than 1200 different obligors.
  • Low correlation: CLOs have historically low correlation with most financial asset classes.

CLO Basics

A CLO Fund seeks to produce attractive risk adjusted returns by investing in Collateralized Loans Obligations securities. CLOs are structured vehicles which invest in SENIOR SECURED LOANS.

CLO’s are:

  • Diversified: each CLO owns 120-200 corporate loans.
  • Actively Managed: the loan portfolio is actively managed by the CLO Manager.
  • Formed mainly by large sub investment grade companies.
  • There are no mortgages, no emerging markets, no direct real estate, no auto loan, no student loan no credit card, no financial institution (banks & insurances).

CLO Structure Example

What is a Senior Secured Loan?

  • Senior secured loans are sub-investment grade corporate debt instruments, generally organized by a syndicate of banks and distributed to institutional investors.
  • They have maturity up around 5-6 years, can be bullet or amortizing and can be early prepaid, generally after the first year without penalty for the issuer.
  • They are considered to be less risky than bonds because the loans are supported by assets pledged by the companies: shares of operating companies and hard assets like machineries, plants, licenses, cash flows.
  • Senior loans are often protected by defensive covenants. Example of corporates with loans: American Airlines, Dell, Burger King, Hilton Hotels Worldwide, GoDaddy, and Charter Communications.
  • Floating rate: Libor + a spread.

Typical Liability Structure of a Sub-Investment Grade Issuer

Leveraged loans represent a large part of the financing provided to sub-investment grade corporations.

Avenida CLO Fund VCC
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CLO Fund VCC

Avenida CLO Fund VCC

Avenida CLO Fund VCC

  • Portfolio of USD CLO junior notes (also known as subordinated or equity notes), CLOs warehouse and lower rated CLO debt securities.
  • The Fund provides private investors with access and liquidity from a minimum of $50,000 to a specialized credit asset class reserved for institutional investors or banks.
  • The institutional class return of the Fund for the first 7.5 years has been over 75%.
  • Diversified portfolio of CLO securities managed by several CLO Managers: the Fund has a 25% limit concentration on CLO securities of the same manager and 10% limit concentration on the same CLO security.
  • The Fund seeks to be involved in the inception of new CLOs in order to influence manager selection, deal structure, features, structuring fees, participate in the warehouse and optimize the call optionality through the life of the CLO.
  • We have access to the primary market and, most importantly, the secondary market for CLOs.
  • Equity tranches of CLO have historically low correlation with most of the financial asset classes.
Ask for the latest factsheet

CLO Arbitrage
An example*

Net Profit 1.35% x USD 500 mn = USD 6.75 mn
distributed on USD 50 mn equity = 13.50%

*Shown numbers for illustrative purpose
Avenida CLO Bond Fund
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CLO bond FUND

Avenida CLO Bond Fund

Avenida CLO Bond Fund

  • The fund invests in CLO mezzanine tranches with an investment grade target rating, mainly “BBB” and not single “B”.
  • The investment horizon of the fund is medium-long term.
  • Diversified CLO securities portfolio of different CLO managers, different CLO vintage and different CLO maturities, with set limits of 20% maximum exposure per CLO managers and 12.5% maximum exposure per CLO note.
  • The portfolio of the fund is actively managed and constantly monitored.
  • The annual gross return in USD for the fund is around USD 3 months SOFR + 300bp.
  • Monthly liquidity and with the option of semi-annual distributions.
  • Invested exclusively in CLO notes with floating rate coupons adjusted quarterly.
  • Diversified and granular underlying loan portfolio of over 1200 credits.
  • Average rating investment grade.
Ask for the latest factsheet
Additional Services
04
OTHERS

Additional
Services

Avenida services

Additional Services

The Avenida team is offering tailor made services for special situation taking advantage of the long experience of the partners, a close relationships with most of the US CLO managers, utilization of INTEX, the most advanced software for CLOs and internal propriety data base.

  • Separate Managed Accounts of CLOs
  • Euro compliant vehicles for US CLO’s portfolio
  • White labelling funds
  • Single CLO analysis
  • Portfolio review supports
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MINDFUL WEALTH

Team

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AVENIDA CLO FUND

Team

Massimo Paschetto

Fund Management

Massimo Paschetto earned his Business Administration degree at Bocconi University, Milano (Italy), in 1986. He started his career as credit analyst in Paris at Banque Paribas, then in 1987 moved to London to the capital markets subsidiary of Banque Paribas (now BNP) as Fixed Income salesman. In September 1991 joined Goldman Sachs in London as head of the Italian Fixed Income sales desk. In April 2000 he joined DLJ as a Managing Director focusing on High Yield and structured credit markets, later in 2000 DLJ was acquired by Credit Suisse. In 2001 he became part of the structuring and marketing team of CLOs at Credit Suisse and he was in charge of institutional distribution for Europe, EMEA and Private Banking sector till 2008. In particular for the latter acted a thorough and conservative managers selection. Then acted as an independent Senior Advisor for CLOs and in June 2015 joined EOF Services (Asia) Pte Ltd, now called Mindful Wealth, as senior investment manager for the start-up of Avenida CLO Fund.

Stefano Paschetto

Fund Management

Stefano Paschetto earned his degree in Economics and Finance at Bocconi University in Italy. He joined Banque Paribas Capital Markets in London (now BNP PARIBAS) as a fixed income salesperson in 1989. In 1994 he became responsible for Europe and the Middle East Fixed Incomes sales teams; then in 2000 he was in charge of Structures & Derivatives Marketing teams; in 2003 he headed the Financial Institutions Teams responsible for distribution of assets and liability solutions; in 2005 he was in charge of the Institutional Clients Group encompassing all teams in Credit, Interest Rates and Forex, a unit of 360 marketing, originators, structuring and research professionals in the EMEA region. He was a part of the BNPP Fixed Income Business Committee and a chairing member of the Transactions Approval Committee. In October 2011, he joined Generation Asset Management in London as a Managing Partner focusing on business development.

Alberto De Micheli

Senior Investment Management

Alberto de Micheli completed Commercial School in Economics in Lugano, Switzerland. He joined Credit Suisse in 1989 and worked in various positions as trader and salesman in Zurich, Geneva and Lugano. Then in 1996 he set up and developed a sales team in Geneva and covered a variety of institutional and private banking clients in Switzerland and Italy on a wide product range including asset backed securities, structured products, emerging markets and derivatives. Between 1998 and 2002 Alberto was the Lugano Branch manager of CSFB. During this time, he started to be deeply involved in CLO equity distribution working along with Massimo Paschetto, selecting the CLO managers and products to introduce to the Private Banking sector. He soon became responsible for the worldwide (ex USA) distribution of CLOs to the Private Banking and UHNW sector and worked in such a role until the middle 2016.