RBC Global Asset Management (RBC GAM) has launched a closed-end interval fund focused on investing in equity and junior debt tranches of collateralised loan obligations (CLOs), expanding its reach into the intermediary and retail market.
The asset manager of the Royal Bank of Canada said the fund, named the RBC BlueBay Enhanced Income Fund, will primarily provide US investors with access to CLOs, while also investing in other structured credit securities.
The fund will focus predominantly on the US market but may also allocate capital to European CLOs, the firm said.
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Toronto-headquartered RBC GAM manages funds on behalf of institutional, high-net-worth and individual investors and oversees $572bn (£427.3bn) in assets under management.
“CLO equity has the potential to provide outsized returns across various cycles as it may benefit from widening asset spreads alongside long-term locked up financing costs,” said Mark Shohet, BlueBay portfolio manager, structured credit and CLOs at RBC Global Asset Management. “With the RBC BlueBay Enhanced Income Fund, we are aiming to provide retail investors access to an asset class that has traditionally been reserved for institutional investors.”
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The CLO tranches held within the fund will be backed by a pool of corporate loans carrying BB and B credit ratings, the asset manager said.
Destra Capital Advisors will act as a distribution partner and provide consulting services to RBC GAM.
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