Credit Investments Group (CIG) is a recognized global non‑investment‑grade credit manager investing in senior loans, high‑yield bonds, rated and equity tranches of collateralized loan obligations (CLO), and private credit.
Credit Suisse Asset Management’s Credit Investments Group is one of the largest non‑investment‑grade credit managers in the US and Western Europe with substantial scale, an extensive network, and experienced local teams in New York and London. CIG offers a select suite of credit strategies designed to help investors meet capital preservation needs and enhance yield opportunities.
Inception of platform in 1998
Two senior members of the Corporate Credit Committee have managed portfolios together for 26 years
Award‑winning institutional credit franchise1
Investments in higher‑yielding, secured, and unsecured floating‑rate senior loans can provide attractive current income coupled with a short duration profile and low historical correlations to core fixed‑income holdings.
Private Credit Opportunities (PCO) is a direct lending offering that sits within CIG, focused on directly originating secured non‑investment‑grade loans from financial sponsors and corporates.
Within the investment process framework, bottom‑up analysis drives the selection of individual investments and a high level of diversity, with strict quality, issuer, and industry concentration criteria.
Collateralized loan obligations (CLO) are securities that are backed by a pool of loans. CIG manages both US and European CLOs, and is one of the leading CLO managers by AuM globally, but also invests in rated and equity tranches of CLOs.
CIG offers multi‑asset strategies focused on non‑investment‑grade credit with a dynamic asset allocation between senior secured loans, high yield bonds, and structured credit.
A natural extension of CIG capabilities investing in high‑conviction relative value opportunities across the credit market, which seeks to maximize current income for investors.
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Senior loans are called “senior” because of their position within a company’s capital structure. As the name suggests, senior loans generally have a first priority on the borrower’s assets. In the event a company files for bankruptcy, creditors of the company are paid back in a specific order and senior loan holders are generally among the first to be repaid.
Aside from offering compelling return potential and superiority in the capital structure, senior loans also offer investors a number of other advantages:
These attributes have led many investors to make long‑term strategic allocations to senior loans to reap the potential benefits through market cycles.
Senior loan risk: There are a number of risks associated with an investment in senior loans including credit risk, interest rate risk, liquidity risk, and prepayment risk. Lack of an active trading market, restrictions on resale, irregular trading activity, wide bid/ask spreads, and extended trade settlement periods may impair the ability to sell senior loans within the desired time frame or at an acceptable price and the ability to accurately value existing and prospective investments.
Senior loans date back to the late 1980s, when the market for high‑yield bonds expanded in the US and institutional investors began to participate in the purchase of loans. This development continued with the increasing consolidation of the US banking sector in the 1990s. The growth of this asset class was primarily down to the increasing involvement of non‑banks, investment funds, and above all pension funds.
Demand for the asset class among institutional investors has increased substantially. The market for non‑investment grade loans is currently estimated at USD 1.4 trillion, thus outstripping the market for high‑yield bonds.
The senior loan market has largely been an institutionally dominated market since its genesis. There are higher barriers to entry compared to traditional equity or fixed income markets, which inherently blocks retail investors from buying individual loans on the open market. Broadly, this dynamic creates a stickier investor base for the asset class, which limits the volume of daily inflows/outflows that retail‑driven markets experience. Lastly, since collateralized loan obligations (CLO) make up roughly two‑thirds of the loan market and have a typical life of roughly eight to ten years, it creates a strong buyer base for the market as a whole.
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1 For more information about the award methodology, time frame, and the number of companies included in the analysis, please visit www.morningstar.com, lipperfundawards.com, creditflux.com and globalcapital.com.
Source: Credit Suisse, unless otherwise specified.
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