MidOcean’s Bet on Risky Collateralized Loan Obligations Returned as Much as 25% in 2024
- Firm eyes fund raising for 2025, 2026 in CLOs, tactical credit
- CIO Carey expects direct lending deterioration in 2025
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MidOcean Credit Partners’ investment in the riskiest part of its own collateralized loan obligations returned as much as 25% in 2024, according to a letter to investors seen by Bloomberg.
The firm raised its debut equity fund for CLOs last year of more than $300 million, which purchases the equity tranches from CLOs it issues. That bet was MidOcean’s highest returning strategy in 2024, according to the letter from Chief Investment Officer Dana Carey. He noted that the returns will normalize over time in line with the fund’s target return. MidOcean is planning a second CLO equity fund in early 2026.