Target Information

Arcano Partners recently completed the successful placement of its first Collateralized Loan Obligation (CLO), named Arcano EURO CLO I DAC, which has a total volume of €435 million. This transaction represents the inception of a strategic plan to execute at least five similar CLO issuances over the coming years, reinforcing Arcano's position in the European CLO market. The firm, acknowledged for its expertise in private markets and fixed income, aims to establish a recurring issuance platform in this sector, with plans to launch two CLOs annually.

The CLO platform within Arcano Partners benefits from more than 15 years of experience in European credit investing and eight years in CLO investments, establishing it as a leader in Spain. Following this transaction, the credit platform manages €3.7 billion in assets through diverse strategies, including corporate syndicated loans, high-yield bonds, structured credit, and direct financing.

Industry Overview

The European CLO market has seen significant growth in recent years, driven by strong demand from institutional investors. These structured finance products provide an effective way to manage risk and enhance returns, attracting attention from both domestic and international funds. As a result, numerous financial institutions are increasingly looking to enter this rapidly evolving market.

The demand for CLOs has led to the emergence of various players in the industry, which compete for the best assets. This competitive landscape encourages innovation and adjustment of investment strategies, with firms striving to provide added value to their clients. Additionally, with a low interest environment persisting in Europe, investors seek alternative investment opportunities to bolster their portfolios amid challenging conditions.

Furthermore, regulatory changes and transparency improvements have positively influenced the CLO market. Enhanced investor protections and the focus on risk management are helping to rebuild confidence in these financial instruments. With increasing scrutiny from regulators and investors, firms are compelled to adopt best practices, which can enhance the overall market resilience.

Looking ahead, the European CLO market is expected to evolve with technological advancements driving efficiency and cost-saving measures. Innovations such as blockchain technology could transform the way securities are managed, further attracting investment into the sector.

Rationale Behind the Deal

The closure of Arcano EURO CLO I DAC marks a pivotal step in Arcano Partners’ growth strategy within the credit market. The robust demand from high-quality institutional investors underscores the strength of Arcano’s value proposition. This first CLO not only solidifies their foothold in the structured credit market but also demonstrates their ability to attract capital in a competitive environment.

This strategic initiative aligns with Arcano’s long-term objective of establishing itself as a leading CLO issuer in Europe, providing investors with well-calibrated risk-return profiles amidst evolving market dynamics. With over a decade of expertise in credit investing, Arcano Partners is poised to leverage its profound market knowledge for future growth.

Investor Information

Arcano Partners was founded in 2003 and is an independent global firm with over 20 years of experience in financial advisory and asset management at an international level. The firm manages and advises on over €11 billion in alternative assets since its establishment in 2006, producing a diverse range of investment solutions across six asset classes including Private Equity, Credit Strategies, Real Estate, Sustainable Infrastructure, Venture Capital, and Aviation Finance.

Dedicated to sustainability and responsible investing, Arcano has emerged as a prominent player in the ESG asset management landscape. The firm boasts a strong team of over 260 professionals across seven offices in Europe and the United States, enhancing its position as a key independent firm in private markets.

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The issuance of Arcano EURO CLO I DAC appears to be a promising investment opportunity, showcasing Arcano Partners' commitment to expanding their footprint in the European credit market. This initial CLO not only validates the firm’s capabilities but also sets the stage for future growth, particularly given the anticipated demand from institutional investors.

Moreover, Arcano’s extensive experience in credit and structured finance positions the firm favorably to navigate potential market fluctuations effectively. The planned issuance of two CLOs each year underlines a well-defined growth strategy that can generate consistent returns over time.

However, potential investors should remain vigilant regarding market conditions and regulatory landscapes. While the demand for CLOs is currently strong, fluctuations in underlying asset quality and economic conditions can impact performance. Thus, careful monitoring of the economic indicators and credit cycles will be necessary to ensure sustainable returns.

In conclusion, with a clear strategic direction, a robust track record, and strong institutional support, Arcano Partners’ entry into the CLO market is positioned to deliver positive outcomes, solidifying its standing as a key player in structured credit across Europe.

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