Fair Oaks Capital is to launch the first ETF in Europe that invests in collateralised loan obligations (CLOs).
The Fair Oaks AAA CLO Ucits ETF was approved by Luxembourg’s financial regulator and will list on Deutsche Boerse Xetra on September 10 and subsequently on the London Stock Exchange.
Alpha Ucits, the platform for the ETF, appointed Waystone to act as management company.
A CLO is a sophisticated financial product that pools together loans and then repackages them into securities that are sold to investors. CLOs offer investors exposure to the loan market with varying degrees of risk and return, making them attractive for those seeking higher yields.
The introduction of a CLO ETF allows investors to gain diversified exposure to this market segment in a more accessible and liquid form.
Alpha Ucits is a specialised hedge fund Ucits distribution and structuring platform founded in October 2009 by Stephane Diederich, formerly a partner at Brevan Howard Asset Management.
Diederich, who is CEO at Alpha Ucits, said: “Everyone at the Alpha Ucits fund platform is extremely proud to launch for Fair Oaks Capital Europe’s first CLO exchange-traded fund. We anticipate significant growth in active ETFs and have Luxembourg’s leading fund platform to support our clients.”
Denis Harty, country head for Continental Europe at Waystone, said Europe’s first CLO ETF “requires extensive know-how and skills, and I am so proud of the Waystone team for delivering this market-first so flawlessly”.
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