Fair Oaks Capital Launches Innovative AAA CLO ETF in Europe

Introduction to Fair Oaks Capital's New ETF

Fair Oaks Capital has made a noteworthy stride by introducing the first European AAA CLO ETF, listed on Deutsche Börse Xetra and Börse Frankfurt under the ticker symbol LAAA. This initiative reflects a forward-thinking approach to investment opportunities, particularly designed for investors seeking exposure to AAA-rated, floating-rate CLO notes. The trading for this product commenced recently, marking a significant development in the financial market.

Investment Focus of the Fair Oaks AAA CLO ETF

The Fair Oaks AAA CLO ETF, known as FAAA, is dedicated to investing in AAA-rated CLOs. It serves as an additional share class of an existing Fair Oaks UCITS fund, the Fair Oaks AAA CLO Fund, which was originally launched in 2019. As of a recent date, the fund boasts assets exceeding €150 million, illustrating its strong market presence. This ETF class is designed to provide investors with access to an established, high-quality portfolio that is exclusively composed of AAA-rated CLOs, adhering to Fair Oaks' time-tested investment strategies.

Investment Management Team

The management of the ETF is handled by a skilled team of six professionals, alongside the broader Fair Oaks credit team. They are adeptly led by Miguel Ramos Fuentenebro and Roger Coyle, who are the co-founders and partners at Fair Oaks Capital. Their expertise plays a pivotal role in guiding the ETF towards realizing its investment objectives.

Significance of the Product Launch

According to Ramos Fuentenebro, the launch represents a vital opportunity for investors. He stated that the Fair Oaks AAA CLO ETF offers investors efficient access to a diverse spectrum of AAA-rated floating-rate instruments. Impressively, from 1997 to 2023, no AAA-rated CLO note has defaulted, showcasing the reliability of these assets as confirmed by S&P Global.

Appeal to Institutional Investors

Stephane Diederich, the CEO of the Alpha UCITS platform, highlighted the strategic essence of presenting the Fair Oaks AAA CLO ETF. With an initial fund size of over €150 million, the ETF stands out as an appealing option for institutional investors. It caters specifically to those seeking to deploy substantial capital allocations while maintaining a balanced risk profile in their portfolios.

Cost-Effectiveness and Accessibility

The total expense ratio associated with the Fair Oaks AAA CLO ETF is set at 0.35 percent, which is favorable for investors looking to minimize costs while tapping into quality investment opportunities. This cost efficiency is a crucial aspect for those evaluating potential investments.

About Fair Oaks Capital

Fair Oaks Capital is recognized as a specialist investment manager focused on corporate credit. Established in 2013, this firm operates from its offices in key global financial hubs. Fair Oaks concentrates primarily on CLOs and secured loans, managing an impressive portfolio valued at over $3 billion, as of a recent date. The firm is also noted for launching the investment industry's inaugural global CLO UCITS fund in 2016.

About Alpha UCITS

Alpha UCITS serves as a prominent platform for distributing and structuring UCITS. Initially founded in 2009 by Stephane Diederich, Alpha UCITS stands among the top 10 UCITS platforms based on assets under management (AUM). The firm's industry recognition is reflected in its numerous awards for excellence in UCITS distribution.

Frequently Asked Questions

What is the Fair Oaks AAA CLO ETF?

The Fair Oaks AAA CLO ETF is the first European AAA CLO ETF aimed at providing investors with access to AAA-rated, floating-rate CLO notes.

Who manages the Fair Oaks AAA CLO ETF?

The ETF is managed by a team of six professionals led by Miguel Ramos Fuentenebro and Roger Coyle, co-founders of Fair Oaks Capital.

What are the benefits of investing in this ETF?

This ETF provides exposure to a diversified portfolio of AAA-rated CLOs while maintaining a low annual expense ratio of 0.35 percent.

Who is the target audience for the Fair Oaks AAA CLO ETF?

Its primary target audience includes institutional investors looking to allocate significant capital without exceeding ownership limits.

What is the historical performance of AAA-rated CLOs?

From 1997 to 2023, AAA-rated CLOs have demonstrated a flawless performance record with no defaults, as confirmed by S&P Global.

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