How We Invest

CLO Management

  • Seeks to achieve better absolute performance with less risk, while providing investors with maximum transparency
  • Invests in larger, liquid, broadly syndicated bank loans
  • Utilizes a rigorous credit research process with a low ratio of credits per analyst
  • Supplements bottom-up analysis with a disciplined approach to risk management and portfolio monitoring

CLO Investing

  • Seeks to achieve attractive absolute returns while minimizing volatility
  • Evaluates CLO tranches using a combination of rigorous qualitative (portfolio, manager and legal considerations) and quantitative (structural, cash-flow, collateral valuation and pricing/relative value) analysis
  • Utilizes a proprietary quantitative analytical tool, CLO ViewPointTM, to view and track Acis credit research team’s credit opinion on each individual loan, including ratings downgrade probability and timing, default probability and estimated recovery values

Acis Capital Management, Highland Capital’s Structured Product affiliate, was established as a separate SEC registered investment adviser in 2010 to specialize in Collateralized Loan Obligation (“CLO”) management and CLO investing.

A CLO is an issuance of securities (AAA to B) and an equity tranche backed by the cash flows from a diversified pool of senior secured corporate bank loans. CLOs are structured with a re-investment period, allowing the CLO Manger to actively buy and sell assets, subject to asset quality covenants for a period of 3-5 years. The return paid to the equity holders is the difference between the current yield on the underlying assets and the financing cost of the issued notes.

Highland was one of the early pioneers in the CLO market, setting up one of the first non-bank deals in 1996. Highland together with Acis has become one of the largest managers of US CLOs with over $11B under management including a secondary CLO investment portfolio with over $2 billion of assets under management. Members of the Acis team have structured and managed over $32B of CLOs across 40 vehicles, have invested in over $13 billion of CLO paper and have traded over $17 billion of structured credit paper over the last decade, providing investors optimal access to the market.

The integration of the Acis CLO platform and its rigorous investment and risk management processes focused solely on CLOs provides investors with unique investment opportunities.

Vehicles Available

– Managed CLOs
– Separately Managed Accounts
– Funds