Investing ethically is becoming a big part of credit, with CLO managers among the first to adopt environmental, social and governance (ESG) investment guidelines. So it’s no surprise that ESG criteria were high on the list of talking points at the Structured Finance Association’s SFVegas gathering last month. At the event, CLO market practitioners debated what constitutes ESG and the merits of positive screening over negative screening (see page 8). But it’s ironic that this particular deliberation took place at a casino. Maybe the debate CLO issuers should have been having is whether the Vegas roadshow could be filed as a CLO marketing expense in the pursuit of an ESG-compliant CLO.

Credit picking skills will be important this year amid heightened idiosyncratic risk, so everyone seems to say. But Ares Management, one of the biggest names in direct lending, has demonstrated that asset managers can also be picky with the mandates they take on, when the firm walked away from a private debt mandate with London CIV in January. The Los Angeles-headquartered firm can afford to be choosy: it won a $750 million private debt mandate from Tennessee Consolidated Retirement Systems two weeks later.