Senior secured floating rate loans — but higher credit quality ones such as high single Bs or double Bs. You read a lot in the newspapers and research that we are closer to the end of the credit cycle. However, companies are still performing relatively well, so there are no real danger signals. I think it’s interesting to position yourself in a higher quality investment with a relatively higher rating, while still being able to generate income from that investment.

Low rated credit like triple C or very low single Bs. Because of where we are in the cycle, many of those companies may be susceptible to problems. We’re looking to invest in those that not only create value and opportunities for investors but also are less susceptible to default or restructuring. If you’re worried about where we are globally in terms of growth, trade wars and China, you should be investing in higher rated companies.

One trend I’ve observed is that we should be careful about sectors that historically had not been a big part of the markets, but that become prevalent. Sponsors or investment banks lever them up and they became overheated and too sensitive to risks. We saw it with healthcare nursing homes, then with the telecoms tech bubble, real estate projects in 2005-2007, and then with oil and gas credits.

I think that we’ll continue to see growth in CLO AUM. Much like we observe with loans, we will see periods of spread tightening and spread widening and it’s just going to be around the edges. Maybe we’ll see some episodic defaults, for example the little default cycles we saw in retail or oil and gas. Those spreads will widen and then will come back.

There are some regulatory considerations, particularly relating to CLOs in Europe that are quite cumbersome. The industry is trying to figure out how to deal with that in terms of disclosure requirements. There is a quantum of data that we need to submit on the assets and we can’t figure out exactly what they want us to submit.

We’re a large CLO manager managing US and European CLOs. Four or five years ago we began building out a separate account business and a commingled fund business. We wanted to grow assets under management and these related strategies. We’re looking at the same assets but it’s just in different fund formats. European CLOs allow us to invest in bonds, but it’s still a small portion of our assets that we manage within our performing credit business.

I started out my career working for banks and then I had the chance of moving from a bank to Eaton Vance, which was one of the first investors. My role models and my inspirations were Payson Swaffield and Scott Page, my two bosses when I was at Eaton Vance. They gave me great opportunities and taught me a lot.