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Axa IM’s latest CLO fund seeks to raise $300m annually

Axa IM Novalto_CLO Credit Fund focuses on investing in mezzanine debt tranches of CLOs. A pension fund has already committed $50m.

Axa Investment Managers (Axa IM) has kicked off fundraising for its latest collateralised loan obligation (CLO) fund with a $50 million investment as it targets raising between $200 million and $300 million annually for the mezzanine-focused vehicle.

The firm launched the CLO fund, titled AXA IM Novalto_CLO Credit Fund, yesterday (6 June). The firm will target the mezzanine tranches of an issued CLO, offering investors a 6 to 8 percent net performance.

The target amount is for each year and there is no deadline for the fundraising.

Christophe Fritsch, co-head of securitised and structured assets and head of structuring at Axa IM, told PDI that he is confident about raising capital, despite competition in the European market. Other CLO fund managers such as 3i Debt Management and BlueMountain Capital Management, both reached final closes last month at €413 million each. In its first quarter earnings report released last month, Intermediate Capital Group announced it has started fundraising for its European CLO fund and is also targeting a final close of €413 million later this month.

Fritsch said: “We are experienced in different parts of the capital structure for CLOs and a relatively large player in the market.” Its previous fund raised $220 million and is now in a period of amortisation and currently manages just under €9 billion of CLO assets as of March 2016.

The firm did not disclose the identity of the investor behind the $50 million commitment, but Fritsch confirmed to PDI that it was a pension fund. The fund invests in both dollar and euro denominated tranches and is open to investors across Central and Western Europe, as well as the Nordic region.

According to the firm’s website, Axa IM has €669 billion in assets under management. The investment arm was founded in 1994 and since 2000 has invested $17 billion in the CLO market. It employs 2,000 people across 29 offices, located across Europe, the Americas, Asia and the Middle East.