The People’s Pension invests £260m in CLOs
The People’s Pension has made a £260m allocation to AAA-rated collateralised loan obligations (CLOs), appointing Invesco to manage the assets.
The investment will combine direct CLO exposure with Invesco’s CLO exchange-traded funds (ETFs) and will represent around five per cent of the £35bn master trust’s default fixed-income allocation.
“AAA CLOs can be integrated into mainstream fixed income strategies, and we believe delivering these through ETFs can simplify access,” said Charlotte Vincent, co-head of fixed income at The People’s Pension. “By including CLOs, investors can tap into a broader opportunity set, reducing concentration risk and improving overall portfolio resilience.”
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The move comes as traditional bond allocations face pressure from lower relative yields, prompting many defined contribution (DC) pension schemes to explore alternative assets. The use of ETFs also offers daily liquidity, which DC schemes require.
The global CLO market has nearly tripled in size over the past decade and now stands at about $1.4tn (£1.15tn).
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Earlier this year, The People’s Pension also appointed Invesco to manage its wider fixed-income portfolio.
“AAA CLOs offer the widest choice with the highest potential yield, with only a marginal increase in risk,” said Scott Baskind, head of global private credit at Invesco. “Doing this through an ETF structure provides investors with the flexibility and transparency to make changes without the traditional operational hurdles of accessing CLOs, all within a liquid, scalable vehicle.”
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