Credit Asset Manager Panagram Debuts Actively Managed CLO ETF

Panagram Structured Asset Management, a subsidiary of Eldridge with a $13.5bn book of credit assets, has introduced its first exchange-traded fund (ETF) – Panagram BBB-B CLO ETF (CLOZ).

The actively managed fund invests in collateralized loan obligations (CLOs), which offer risk-adjusted exposure to lower-rated corporate bonds. The ETF is listed on NYSE Arca and has an expense ratio of 0.50%.

Panagram invests in CLOs with credit ratings between BBB+ and BB- that have a minimum initial total offering size of $250mn. Up to 70% of the portfolio may be allocated to CLOs rated below investment-grade, while the fund may also hold a maximum of 10% of its assets in CLOs with a credit rating above BBB+.

“Our goal is to provide investors with a liquid alternative to traditional fixed income with attractive structural features and competitive yield,” said John Kim, CEO of Panagram and portfolio manager of CLOZ.

The credit asset manager has extensive experience in originating, structuring, monitoring and investing in the CLO market and currently oversees one of the largest portfolios in the market.

The $1tn CLO market often has historically provided higher yield than similarly rated corporate bonds and benefit from structural rules that may benefit investors from credit loss. CLOs are backed by senior loans that sit at the top of the corporate capital structure and are secured by corporate assets.