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CLO Insights: The Interplay of Fees, Trading, and Capital Preservation

As highlighted in the table below, a US CLO manager typically earns a combined senior and subordinated management fee of 40–45 bps for managing a BSL CLO. Consequently, some investors might believe they derive greater value if their managers actively trade the portfolio. After all, a CLO is a managed vehicle, and managers are remunerated…

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