Korea Investment & Securities Expands CLO Business with Anchorage Capital

Korea Investment & Securities, a subsidiary of Korea Financial Group, announced on the 22nd that it has established a collaborative relationship with Anchorage Capital to expand its collateralized loan obligation (CLO) business.

As the first step, Korea Investment & Securities' New York branch, ‘KIS US,’ will invest in Anchorage Capital's credit fund. This fund invests in structured products backed by financial loans such as CLOs and leveraged loans. Additionally, they plan to increase the investment scale and expand the CLO-related business by utilizing the network held by Anchorage Capital.

CLOs are structured products that pool leveraged loans from companies with varying credit ratings and issue securities based on the cash flows generated. By combining 200 to 300 leveraged loans, the risk is diversified, resulting in a lower default rate compared to other corporate debts and structured products.

Previously, Korea Investment & Securities partnered with the Carlyle Group, one of the world's largest private equity firms, to launch CLO products three times, which were difficult for domestic individual investors to access. Anchorage Capital, with approximately $23 billion (about 31 trillion KRW) in assets under management related to CLOs and structured credit, is expected to supply a wider variety of global structured products to the domestic retail market through this partnership.

Yale Baron, Co-Chief Investment Officer of Anchorage Capital, stated, "We will actively support Korea Investment & Securities in expanding its influence in the U.S. leveraged credit market and capturing various structured deal opportunities."

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