PPM America -Fri, 08/08/2025 - 08:43

An Introduction to CLOs and CLO Equity

What is CLO Equity?

A collateralized loan obligation (CLO) is a special purpose investment vehicle that issues bonds at different rating levels as well as an unrated equity tranche to raise funds. The CLO then invests those proceeds in a diversified pool of floating rate loans
Bond investors are paid on a quarterly basis according to their seniority in the capital structure. Equity tranche investors receive all of the excess payments each quarter. The equity tranche bears the risk of the first loss but also captures the potential upside

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Contacts

PPM America

Established in Chicago in 1990, PPM America, Inc. (PPM) is a US-based institutional asset manager with $90.09 billion in assets under management as of September 30, 2025 (1).

Originally founded as a captive asset manager for a global insurance company, we now oversee more than $69 billion on behalf of insurers globally. PPM exists to consistently support our clients in achieving their long-term value goals and has the experience and the expertise to support insurer’s unique and evolving needs across a range of investment solutions including public and private fixed income, real estate and private equity.

(1) AUM includes committed but unfunded capital for PPM’s private equity and commercial real estate businesses. AUM includes both securities issued by PPM CLO vehicles held by PPM separately managed account clients and the underlying collateral assets of the CLO vehicles managed by PPM.

Bob Meikleham
Managing Director, Global Client Group, Insurance
bob.meikleham@ppmamerica.com
312-843-5929

https://www.ppmamerica.com/

225 West Wacker Drive, Suite 1200
Chicago, IL 60606

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