According to a CLO investor, the events of the past 12 months have led to the sell side exodus. “A lot of bankers stuck with it last year as there weren’t many firms hiring. But Q1 has been chaotic and bonus packages were not strong, which has led many structurers to switch to the buy side where the work-life balance is perceived to be better.”

On the buy side, CLO issuers and investors have also been busy this year with a full pipeline of deals across new issues, resets and refinancings.

However, a lack of stan­dard­ised documentation is adding to the time it takes for investors to analyse each deal.

“It creates a bottleneck,” says Carlyle Group’s co-head of liquid credit Lauren Basmadjian. “I think the CLO market could benefit from more standardised documentation — it could ultimately drive down spreads and benefit the equity. It would also make CLO transactions a lot more efficient.”

Sources say that investment banks are conducting interviews to replace lost headcount in the knowledge that CLO volumes will be elevated for some time.

For asset managers, the focus is on growth. “There has been a lot of hiring, expanding resources for buy side analysts in CLOs,” says Lisa Quackenbush, managing director at Greenwich-based recruitment firm Sage Search Advisors.

Capital Four is among the managers expanding into US CLO management this year — it hired MidOcean Credit Partners’ Jim Wiant to lead this initiative.

Diversity is also becoming a primary consideration for asset managers as they set about recruiting, with about 80% of the searches conducted by Sage focused on this, according to Quackenbush.