The funds will invest across the full credit spectrum from AAA to sub-investment grade. The new Aegon High Grade CLO, European CLO and European CLO Opportunities Funds provide investors with access to opportunities within the rapidly growing European CLO market (now estimated at around €300 billion), while offering an attractive yield potential.

The asset manager manages €23 billion in asset-backed securities (ABS) and CLOs globally, including over €4.5 billion in European CLOs, with a dedicated investment team of more than 20 professionals supported by Aegon AM’s European Leveraged Loans and US CLO teams.

The investment team has been investing in European CLOs since 2005, and in US CLOs since 1996, with dedicated CLO and ABS strategies managed for external clients since 2004.

The firm claims that over this period, there have been no defaults across any Aegon AM-managed CLO or ABS strategy.

The new funds’ focus is on European CLOs, which typically offer stronger credit quality than their US counterparts. These instruments generally have lower exposure to weaker loans and reduced impairment rates, providing enhanced downside protection.

The new funds offer daily liquidity and are Luxembourg-domiciled UCITS.

The Aegon High Grade CLO invests in the highest quality CLO tranches (AAA and AA). Exposure to AA is capped at 25%.

The Aegon European CLO invests across investment grade tranches, with an average credit quality of A/BBB. The fund does not invest in non-investment grade CLOs, ensuring a consistent focus on high-quality credit exposure.

The Aegon European CLO Opportunities Fund, available to institutional investors only, focuses on non-investment grade CLO tranches. This approach targets higher-yielding segments of the CLO market, offering enhanced return potential through exposure to lower-rated credit.

Frank Meijer, head of alternative fixed income & structured finance at Aegon AM, said: “We find the risk-return profile of European CLOs very attractive and believe the floating-rate nature of CLOs is particularly appealing in a time of possible interest rate volatility. As the scale of the market continues to grow, it’s been possible for us to set up scalable and diversified CLO funds across the rating spectrum.

“These new funds build on our experience investing across the CLO capital structure and respond to clear client demand for more tailored access, whether targeting higher quality income or looking further down the capital stack for enhanced returns over traditional credit.”