CIFC Teams Up With Israeli Firm to Start CLO-Focused Credit Fund

CIFC Teams Up With Israeli Firm to Start CLO-Focused Credit Fund

Israeli firm IBI Investment House has teamed up with alternative credit firm CIFC Asset Management to launch a new fund investing in leveraged loans that get packaged into bonds, according to a press statement.

The fund, named IBI CLO Strategies Fund, will cater to Israeli investors seeking exposure to collateralized loan obligations, an asset class that has become increasingly appealing due to the higher yield it offers. The firms will invest across the CLO capital structure, looking at both debt and equity in the primary and secondary markets in the U.S. The fund will also invest in CLO warehouses.

The launch follows a wave of other money managers trying to beef up their alternative credit businesses to secure their returns as they navigate the highest inflation in decades. Some products in the alternative credit business, such as CLOs, have lured investors looking for floating-rate products as the Federal Reserve gears up for an expected steep interest rate hiking cycle.

“The resiliency that CLOs have demonstrated across recent credit cycles is well suited for the current market environment, and we are pleased to be able to offer Israeli investors exposure to this attractive asset class in a format tailored to their liquidity preferences,” Steve Vaccaro, chief executive officer and chief investment officer for CIFC, said in a statement dated April 26. 

IBI’s entrance into the CLO space marks a sharp contrast with other market players who have sought to consolidate their presence by purchasing or merging with other firms managing the bonds. In the past couple of months, Carlyle Group Inc. agreed to buy Todd Boehly’s investment shop, CBAM Partners LLC, for $787 million, while Blue Owl Capital Inc. purchased Wellfleet Credit Partners in April to jump start an entry into the space.

The fund officially closed earlier this month and will begin accepting new subscriptions in May, said a spokesperson. The Tel Aviv-headquartered firm will manage it, while CIFC -- one of the biggest managers of CLOs in the U.S. -- will act as its sub-advisor.

“We are pleased to launch IBI CLO Strategies Fund and to partner with CIFC, one of the largest and most well-recognized managers of CLOs globally, to provide our investors access to the CLO market at a time when demand for CLOs has never been greater,” said Dave Lubetzky, CEO of IBI, in the statement.

Tzvika Katzman, senior investment manager at IBI, and Jason Ziegler, managing director and CIFC CLO specialist, structured the fund. Katzman will lead it as its CEO once it’s live. CIFC’s Jay Huang, head of structured credit, and Matthew Andrews, head of capital markets, will work as the fund’s co-portfolio managers.

CIFC, with over $39 billion in assets across corporate and structured credit, recently boosted its direct lending business. 

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