Tag Archives: CLO Equity IRR

EU Module (Historical Performance and Style)

EU CLO Equity IRRs: Key Insights and Trends (Updated)

Based on a sample of 116 EU CLO deals that have either already been redeemed or are expected to be fully redeemed soon, equity tranches from the 2020, 2022, and 2023 vintages delivered particularly strong returns. These deals stood out with impressive final IRRs, supported by healthy equity NAVs at exit. The final table in this article presents each manager’s average IRR, annual distribution, and equity NAV across their redeemed deals, along with the percentage of those deals that ranked in the top quartile for equity IRR performance. Of the 41 managers in the sample, 23 achieved an average equity IRR of 10% or higher on their redeemed CLOs.

Redeemed in 2024: EU CLO BB Tranche IRRs vs. Equity IRRs

As shown in the table below, across all issuance years, the median IRRs of EU CLO equity tranches were higher than their corresponding median BB tranches. However, BB tranches tend to exhibit a more stable IRR profile and demonstrated better IRR performance at the 25th percentile for deals from 2015, 2016, 2017, 2018, and 2022.