MUFG’s asset manager targets Japan buyers for its first CLO fund

Mitsubishi UFJ Asset Management (MUAM) will launch its first fund comprising collateralized loan obligations (CLOs), heeding the government’s call on finance firms to offer products that boost returns for Japanese investors.

The securities, which are bundled leveraged debt, will mainly hold dollar-denominated floating-rate loans made to U.S. companies. The unit of Mitsubishi UFJ Financial Group, Japan’s biggest bank, aims to launch the fund in January with a size of several billion yen, according to Kosuke Nagata, general manager of the firm’s credit investment division.

“It is extremely important to diversify interest-rate risk within a bond portfolio,” Nagata said in an interview. In that regard, being able to offer investors floating-rate assets is a key development, he said.