Nuveen, the investment manager of TIAA, is expanding its alternative investment platform for the wealth market by launching a collateralised loan obligation (CLO) exchange traded fund (ETF).
The ETF will focus on the single A segment, in contrast to the majority of CLO ETFs currently available, which focus on triple A-rated CLOs.
“To complement traditional income portfolios, and with increased awareness of the robust yields and lower historical defaults of CLOs, we’re seeing significant demand among our clients for this attractive alternative credit allocation,” said Jeff Carlin, head of global wealth advisory services at Nuveen.
Read more: European CLO issuance to double by 2030
To provide access to mezzanine and equity tranches of CLOs in an interval fund structure, in the first quarter of 2025, Nuveen also intends to convert the Nuveen CLO Opportunities Fund, currently an LP fund, to the Nuveen Enhanced CLO Income Fund, a proposed interval fund.
Nuveen’s leveraged finance investment team manages more than $43bn (£35.5bn) in assets under management across CLOs, high yield credit, broadly syndicated loans, and alternative credit strategies. Of that $43bn, the CLO platform accounts for $17.8bn.
“Investors are seeking to build better diversified, more resilient, better performing portfolios with these assets,” said Joy Crenshaw, CIMA, head of advisor development at Nuveen. “Advisors have also recognised that they can enhance their value proposition with clients by helping them access alternative assets.”
Read more: BondBloxx launches private credit ETF
In September State Street partnered with Apollo Global Management to create an ETF that invests in both public and private credit, which is marketed to retail investors.
Capital Group and KKR also joined forces on a similar project to launch public-private investment funds in May, while Blackstone has moved to target wealthy individuals with semi-liquid credit and real estate funds.
Read more: CLO ETF market grows to $19bn
