Alcentra, a global alternative credit asset manager under Franklin Templeton, has secured over US$1 billion in new equity capital commitments for its collateralized loan obligation ( CLO ) strategies.

The capital will be mostly invested in CLO mezz and equity via the firm's third-party CLO tranche investing platform.

A portion of the capital will form part of Alcentra’s second captive European CLO equity fund, contributing to approximately US$4 billion of assets under management in European CLOs over the next three years.

Alcentra says the funding highlights the strong appetite from institutional investors for opportunities in the global CLO market, and underscores its track record of delivering superior risk-adjusted returns through its disciplined approach to credit investing.

Alcentra currently manages over US$18 billion across European loans, European CLO issuance, and global third-party CLO tranches, via its European liquid credit and structured credit businesses.

Its structured credit business is led by Cathy Bevan and its European liquid credit business by Daire Wheeler.

“We have seen a resurgence in the popularity of CLOs among major institutional investors over the past six months,” says Cathy Bevan, head of structured credit and portfolio manager at Alcentra. “The track record of our global structured credit business, the set-up of our team across the US and Europe, and our ability to be dynamic means we are very well positioned to capitalize on the asset class’ growing appeal.”