Investment Management Case

 

Milestones Capital (MC) is an Alternative Investment Fund under the supervision of the Danish FSA.

MC was established in 2014 as a systematic quantitative fund, but the objective was changed in late 2016, when MI became a partner in MC.

The fund has since been operated with an actively managed, long term credit strategy. Since 2017 MC has succeeded in reaching an accumulated return at more that 100% since inception after all costs. 2023 return was 10,9% and 2024 return is end of November 2024 + 12,1% after all costs.

CLOs have historically been an asset only available to large institutional investors. Given what we believe is the attractive risk/return characterization of CLOs and CLO equity, we believe private investors will increasingly want access to the asset class.

A CLO is a leveraged vehicle, at 10x Assets / Equity, which isn’t too dissimilar from the leverage of a large bank today. The CLO, however, is a pure-play investment in the underlying CLO loans, while banks operate in multiple business lines.

Given the diversity of loans in an individual CLO, an investor could own 5-7 CLO equity tranches and have exposure to over one thousand loans. While there are hundreds of loans in a CLO, it’s really the few loans that default that will likely differentiate the returns of one CLO’s equity tranche vs. another.

 What’s the probability we have a negative return on a CLO equity investment?

Eagle Point Credit published a study of all CLOs issued between 2002 and 2011 and found only 4% had negative returns.

Melbye Invest can advise you building up you own portfolio in your own trust/company/individual.

You can invest in Milestones Capital if you want being a part a larger diversified CLO Equity portfolio or we can structure your own portfolio i.e., in/or with other more secured CLO trances from AAA to BB.

We have access to top managers around the world and can guiding you in how to analyze opportunities.

To learn more about MC se: www.milestones-capital.com

 

 

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Oak Hill            KKR