Kartesia was invited to speak at the annual OPAL European CLO Summit in London
550 investors, managers, issuers and other participants arrived in London on 9th of October to discuss the current state of the European CLO market. Sharif Anbar-Colas participated in the investor roundtable to explain Kartesia’s view on the how the current market dynamics are affecting CLO returns and answer questions from participants as to how to analyse and monitor risk in structured credit.
As opposed to previous years when the economic macro environment was more benign, participants in the conference were keen to hear of ways in which their downside risk could be quantified and managed. Along with the more hawkish economic policies of the US, participants have to contend with increased political risk in Europe from growing populist movements as well as regulatory changes that affect the Structured credit investment landscape and value drivers.
One of the main concerns participants raised was how to manage risk as we enter the end of an expansionary credit cycle. As interest rates normalize and debt becomes more expensive to borrowers, returns will be more dependant upon having selected the right credit pools, making Kartesia’s credit underwriting expertise a key part of alpha generation. When combined with the capacity to analyse structures and the knowledge of how different ramifications in legal documentations affect these structures Kartesia is able to source unique opportunities that offer differentiated value and good risk adjusted returns.