Sector developments and company hires

Bluerock is set to launch a new CLO interval fund in partnership with WhiteStar, who will serve as sub-advisor, which offers to investors high income and portfolio diversification. Marking the firm’s second interval fund, the ‘Bluerock High Income Institutional Credit Fund’ will aim to provide investors with access to income-producing senior secured loans with a portfolio made up of actively managed pools of diversified CLOs. The fund aims to not only deliver to investors access to an investment class usually only available to institutions, but also a high current income of around 8% annually, attractive risk-adjusted total returns, and the potential for diversification with its low correlation to broader markets.

The registered interval fund has launched with around US$85m in initial seed capital, with its initial portfolio offering exposure to US$4.7bn in underlying loans from more than 670 issuers. The fund also benefits from a 100% floating rate structure, as well as a multi-year track record of historical cash flow generation.

In other news..

North America

The FHFA has announced it will be exploring alternatives to its recently proposed upfront fee for comingled securities following feedback from an array of mortgage market participants (SCI 30 June). Concerns were expressed to the FHFA following the announcement of the fee two weeks ago, specifically regarding its impact on the Uniform Mortgage-Backed Security (UMBS) market. The FHFA has promised to conduct a review of the 2020 Enterprise Regulatory Capital Relief Framework (ERCF) to confirm the risks of comingles securities are accurately reflected, in an effort to help ensure the long-term viability of UMBS.