VanEck Enters CLO Equity Market with First Interval Fund, Sub-advised by PineBridge
Actively managed by
The Fund is an unlisted interval fund with no secondary market, and shares are illiquid, redeemable only through limited quarterly repurchase offers (typically 5-25% of shares) that may be oversubscribed or suspended. It invests in complex CLO debt and equity with elevated credit risk and potential for loss. Leverage and distributions, including return of capital, may increase volatility and reduce net asset value. Past performance is no guarantee of future results.
The Fund is VanEck's first interval fund and is designed to provide access to less liquid segments of the CLO market with historically differentiated return characteristics. The interval structure aligns the Fund's liquidity profile with the underlying CLO equity and mezzanine markets, to support a disciplined, long-term investment approach.
CLO equity, which captures the difference between what a CLO earns from its loan portfolio versus what it pays to CLO debtholders, offers the potential for attractive quarterly distributions and the ability to benefit from active management and embedded optionality that is distinct from investments in CLO debt. Mezzanine debt investors benefit from built-in structural protections, including subordination and coverage tests, which have historically supported strong credit performance relative to similarly rated corporate bonds while offering significantly greater spreads historically. Debt and equity have distinct return drivers, and the flexibility to invest in CLO equity and debt allows the Fund to capture the most attractive opportunities as the market changes. Performance dispersion within equity and junior debt tranches underscores the importance of security selection and active oversight.
"With the
The launch expands VanEck's suite of CLO investment solutions, which includes the investment-grade focused
"We believe our experience issuing and managing CLOs provides us a differentiated perspective in evaluating managers, structures, and underlying collateral," said
Visit the fund page for the
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Important Disclosures
The fund is subject to a high degree of risk and volatility and could result in significant losses, including the loss of a substantial portion or all of your investment.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees.
An investment in the
The Fund is a closed-end management investment company structured as an "interval fund," and its shares are not listed on any securities exchange and are not expected to have a secondary market, so an investment should be considered illiquid. Liquidity is provided only through quarterly repurchase offers conducted pursuant to Rule 23c-3 under the Investment Company Act of 1940, which generally permit the Fund to offer to repurchase between 5% and 25% of outstanding shares per quarter, as determined by the Fund's Board. Repurchase requests may be oversubscribed and prorated, meaning you may be unable to sell all (or any) of your shares when desired and may have to hold shares for an indefinite period, and repurchase offers may be suspended or postponed in limited circumstances.
The Fund invests primarily in CLO debt and CLO equity (including BBB-rated and lower tranches and unrated equity). CLOs are complex and may be difficult to value and trade and are exposed to leveraged-loan credit risk, including borrower defaults and reduced recoveries. Investments in CLO equity and other junior tranches are subject to structural subordination and "first-loss" risk, including the diversion of cash flows to senior tranches after certain collateral quality test failures, and may result in a partial or total loss of investment.
The Fund may employ leverage, which may magnify gains and losses and increase volatility of the Fund's net asset value. The Fund's distributions, if any, are not guaranteed and may be paid from sources other than net investment income, including return of capital or borrowings, which may reduce the Fund's net asset value and capital available for future investment.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
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