Eagle Point Founder Makes the Case for CLOs

The video discusses the performance and structure of CLOs, comparing them to CDOs and highlighting their resilience during financial crises. It examines the role of Japanese investors and the impact of regulations on the CLO market. The video also explains the reinvestment strategies of CLOs and their ability to outperform during market downturns.

How did CLOs perform during the financial crisis compared to CDOs?

• CLOs performed worse than CDOs.

• CLOs were not affected by the financial crisis.

• CLOs had similar performance to CDOs.

• CLOs performed better than CDOs.

What role do Japanese investors play in the CLO market?

• They only invest in equity tranches.

• They are minor players with little influence.

• They have recently exited the market.

• They are major players, especially in the senior tranches.

What is a key feature of CLOs that differentiates them from static securitizations?

• CLOs have a fixed pool of loans.

• CLOs have a reinvestment period.

• CLOs do not allow for any reinvestment.

• CLOs are only backed by mortgage loans.

How do CLOs manage to outperform during financial downturns?

• By reducing their loan portfolio.

• By relying on government bailouts.

• By selling off all their assets.

• By having longer financing than their assets.

What is the median IRR for CLO equity tranches created before the financial crisis?

• 5%

• 10%

• 15%

• 20%