State Street Investment Management (State Street IM) and Blackstone Credit & Insurance announced plans to launch an actively managed European CLO ETF, expanding their liquid credit partnership into Europe for the first time. The ETF will invest in floating rate AAA-rated tranches of Euro-denominated CLO debt, providing investors with diversified exposure to senior secured corporate loans and bonds. 

Under the structure, Blackstone—the world’s largest CLO manager—will serve as sub-investment manager, actively managing the portfolio. State Street IM will act as ETF sponsor and investment manager, overseeing governance and distribution to a broad base of institutional clients, including asset managers, asset owners, private banks, and wealth managers. 

“Through an active ETF structure, we will leverage this expertise with a shared goal of generating higher returns from liquid debt tranches, which have exhibited historically high yields and a low duration risk profile,” said Ann Prendergast, head of EMEA at State Street IM. 

“We are excited to partner with State Street to broaden access to liquid credit in Europe,” added Dan Leiter, global head of liquid credit strategies and head of international for Blackstone Credit & Insurance. “As the largest CLO manager globally, we see strong momentum in Europe, which is an area of conviction and growth for Blackstone and our credit business.” 

The launch builds on the firms’ successful U.S. partnership, which includes two ETFs focused on the loan and high yield markets. Pending regulatory approval, the European CLO ETF will be listed on Deutsche Börse Xetra, Borsa Italiana, and the London Stock Exchange, and will be available to institutional investors across Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Spain, Sweden, and the UK.