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News Analysis
US CLO industry flies in for summer tour of Europe
by Kathryn Gaw
American accents are forming the soundtrack in Europe this summer, as the region’s CLO market attracts investor interest from around the globe.
At the FT Live’s Global ABS conference in Barcelona in June, thousands of European delegates rubbed shoulders with a plethora of US investors seeking meetings with the growing number of Europe-based portfolio managers, including a few new entrants. US-based arrangers also vied for new business, while some US CLO managers appeared to be testing the waters ahead of their own European expansion plans.
One investor said: “There were more Americans than I think I have ever seen.” The investor added that their overwhelming takeaway from the conference was that “the people I met were bullish on the European loan market”. The tone echoed that at the Creditflux CLO Symposium in April, where many US-based managers and investors were busy doing deals and absorbing industry insights at the Chancery Rosewood in London.
Meanwhile, at FII Priority Rome, bankers pointed out the importance of building out the European securitisation market.
Another record in 2026?
This activity lines up with a trend that has seen issuance volumes rise across the European CLO market. According to Deutsche Bank research, there was EUR 60bn of CLO new issue volume in 2025, compared with EUR 49bn in 2024 — a 22.4% year-on-year increase. Anecdotal reports suggest 2026 could be another record year.
The private credit market has also seen a boost, thanks to increasing allocations from international investors, including investors in the US. “With the tariffs, a lot of non-US investors made the decision in 2025 that they were going to increase their exposure to Europe in 2026,” said Allison Davi, co-COO and head of business development with Benefit Street Partners.
“We saw a huge uptick in direct lending demand this year. That was true in Korea. That was true in China, in particular. That was true in Australia. And even in the US, people decided, OK, if we were 70% US and 30% Europe, we’re going to increase that European percentage by 1% to 2%, which is a big deal for some really large managers.
“So I would say Europe has been very much in vogue this year. I don’t know if that will remain for 2027.”
Europe has been in vogue this year
Allison Davi
Co-COO & head of business development
Benefit Street Partners
The migration of US money, talent and business models into Europe comes at a key moment for the continent’s CLO market. Securitisation regulation is being worked out by a trilogue made up of the European Commission, the Council of the European Union and the European Parliament, amid hopes that the final legislation will open up the market to a much wider range of global investors.
These investors will be able to choose from an ever-growing cohort of European managers. More than 70 CLO managers now operate in Europe, while another dozen or so are rumoured to be joining in the coming year.
In Barcelona, representatives from Kartesia, Fasanara, Golub and Eiffel were among the new entrants marketing their strategies. Meanwhile, US firms Elmwood, Diameter and Muzinich have already launched European CLO businesses this year, while AGL, Squarepoint, Crescent and Octagon are among those believed to be looking at establishing their own European shops.
Santander sent its US arranging team to Barcelona to scope out opportunities to work with managers in the European market for the first time, joining a group of new arrangers pitching for opportunities.
Market participants said it was a great time to be a European CLO manager, as the market’s maturity, diversification and arb have been drawing the attention of investors across the globe.
“It does remain probably a less crowded market, as we think about new LBO financing, than the US,” said Jeff Kivitz, CIO of Canyon Partners, speaking about Europe on the Credit Exchange with Lisa Lee podcast, “We continue to lean in there.”
Europe wins on yield
While the US CLO landscape has been somewhat stymied so far this year by tightening spreads, macroeconomic volatility and the constant threat of market-pausing tariffs, there is a little more yield available in Europe. According to data from Benefit Street Partners, by the end of May 2026, US triple A spreads were at 126bps over SOFR, while double As were at 155bps and single As were at 190bps. By comparison, European triple As were trading at 127bps over Euribor on the primary market, and at 190bps and 210bps on the double and single As, respectively.
News of Europe’s emerging status as a higher growth, somewhat higher yielding CLO market has clearly made its way across the Atlantic, and Barcelona was the perfect place to bring US and European interests together.
Based on overheard comments and off-record conversations across the conference, the US CLO machine is set to fuel the next stage of European growth, as the CLO market becomes increasingly global.
