Fair Oaks Income Fund is buying, in the primary market, $26.4m notional of equity notes, representing 75% of the total equity of Neuberger Berman CLO XIX, a new CLO backed by a portfolio of US broadly syndicated, secured loans.
The manager of this CLO’s portfolio is Neuberger Berman Fixed Income LLC, a subsidiary of Neuberger Berman LLC, which is an independent, employee-owned, asset management firm with $250 billion assets under management in equity, fixed income, and alternatives. Neuberger Berman LLC manages $38 billion of non-investment grade assets, including $9 billion of loans.
This CLO’s current target portfolio has a principal value of $400 million across an expected 160 unique bank loan issuers, with an expected weighted average exposure per issuer of approximately 0.6%.
The potential total return for this investment, as estimated by the general partner of the Master Fund, is between 14% and 16% per annum.
After this investment, the Company will be 90% invested. In light of the current cash balance and the Shareholder authorities granted at the recent AGM and the continuing deployment into attractive investments, the Company is considering its options to issue Ordinary or C shares. It is expected that any new shares would be issued on terms comparable to recent issues by the Company.
Fair Oaks new investment with 14%-16% return