4. Rank Manager 2.0 AUM ($bn) Annual growth ($bn) Annual risk retention ($m)
54 TPG 2.43 0.97 48.60
57 Triumph 1.90 0.76 38.00
88 Wellfleet 1.12 1.03 51.69
• 46 managers have issued more than $3 billion of 2.0 CLOs
• 110 managers have printed at least one deal since 2010
• 72 US CLO managers have printed deals in 2016 and 40
managers have completed a risk-retention compliant CLO
Risk retention-compliant CLOs
6. CLO
manager
3rd party
investor
Majority-owned affiliate
CLO
85-90% stake10-15% stake
Collateral
management
agreement
5% risk retention
Pros
• Fairly quick and cheap to
establish
• It can be converted into a C-
MOA with relative ease
• There is limited impact on the
operations of the existing CLO
manager
Cons
• Typically, it does not comply
with EU risk retention
• Manager has to put in at
least 10-15%
Option 1: MOA
7. ZAIS Group 3rd party investor
Majority-owned affiliate
ZAIS Group
CLO
49%
stake
51%
stake
Collateral
management
agreement
5% risk
retention
Spotlight on ZAIS Group
8. 40/86: Credit manager for insurance company
Voya: Alternative credit manager with insurance business
Fidelity: Part of insurance and mutual fund family
Anchorage: Hedge fund manager
Marathon: Hedge fund manager
Och-Ziff: Hedge fund manager
Zais: Hedge fund manager
CSAM: Large credit manager, part of Credit Suisse bank
GSO: Large credit manager
TPG: Credit management arm of PE giant TPG
Angelo Gordon: Alternative credit manager
Black Diamond: Distressed, private equity and CLO manager
Octagon: CLO and structured credit manager owned by Conning
Sound Point: Alternative credit manager
Steele Creek: CLO manager owned by Moelis
Wellfleet: Credit management arm of PE firm Littlejohn
Who is using or planning an MOA?
12. Option 3: CMV
Existing CLO
manager
Master fund
CMV
CLO
100%
ownershipManagement
services
agreement
5% risk retention
Collateral
management
agreement
Pros
• CMVs can be used to achieve
compliance with US and
European risk retention rules
• Manager is not obliged to put
any capital into the CMV
Cons
• Dual hatting of certain
employees is required
• Can be fairly time-consuming
and costly to establish
• Needs to demonstrate real
independence from original
manager – separate board,
credit committee
13. Spotlight on Napier Park
Napier Park Master fund
Regatta Loan
Management
CLO
100%
ownership
Management
services agreement
5% risk
retention
Collateral management
agreement
14. Who is using or planning a CMV
Apollo
BlueMountain
GoldenTree
Napier Park
Oaktree
Triumph Capital
15. Existing manager
3rd party
investors
New CLO manager
CLO 2
Majority stake
Minority stake
Sub-advisor 1
Sub-advisor 2
Sub-advisor 3
CLO 3CLO 1
Management
services agreement
The multi-manager solution
16. With thanks to White & Case, Dechert, Cadwalader,
Seward & Kissel, ZAIS Group and Napier Park.
For more information please contact Sayed Kadiri at
sayed.kadiri@creditflux.com