State Street IM and Blackstone Launch New European CLO ETF

State Street Investment Management and Blackstone Credit & Insurance on Tuesday announced the upcoming launch of an actively managed European Collateralised Loan Obligation (CLO) ETF, building on the existing liquid credit partnership between the two firms.

Following regulatory approval, the ETF is expected to be available to institutional investors in Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Spain, Sweden and the United Kingdom via listings on Deutsche Börse Xetra, Borsa Italiana and the London Stock Exchange.

The European CLO market, currently valued at $294.29 billion, has grown at an average of 8% in the past five years and is forecast to result in $58.86 billion of issuance by year-end 2025.

In anticipation of this investment opportunity, the new fund will invest in floating rate AAA rated tranches of Euro-denominated debt issued by CLOs, giving access to European senior secured corporate loans and bonds.

As sub-investment manager of the ETF, Blackstone will actively manage the securities, while, as the ETF sponsor and investment manager, State Street IM is responsible for the governance of the ETF and will also oversee distribution to institutional investors, including asset managers, asset owners, private banks and wealth managers.

The ETF will be the first credit collaboration between the two firms in Europe, building on their US credit partnership which includes two US ETFs sponsored by State Street IM and sub-advised by Blackstone that focus on the loan and high yield spaces. Having been an investor in active CLOs dating back to 2001, Blackstone has extensive experience with active CLO investment and issuance through cycles.

This new initiative brings two leaders in the asset management industry together to strive to deliver a new solution for investors.

As a leading provider of ETFs for more than three decades, State Street IM has a long history of delivering innovative products to market including the first US ETF, launched in 1993. Blackstone is the largest global manager of CLOs and leveraged loans. The firm set a record for global annual CLO issuance in 2024, beating its own previous record set in 2021, underlining the firm’s status as a leader in this field.

Diversified Exposure

Ann Prendergast, Head of EMEA at State Street Investment Management, said that building on more than a decade of partnership with Blackstone, they were excited at the opportunity to provide European investors diversified exposure to the CLO market.

“Both State Street IM and Blackstone have brought our deep expertise and global scale to bear in the development of this product. Through an active ETF structure, we will leverage this expertise with a shared goal of generating higher returns from liquid debt tranches, which have exhibited historically high yields and a low duration risk profile,” she said.

Dan Leiter, Global Head of Liquid Credit Strategies and Head of International for Blackstone Credit & Insurance, said that as the largest CLO manager globally, they were seeing strong momentum in Europe, which is an area of conviction and growth for Blackstone and our credit business.

Mark Alberici, Global Head of Product Innovation and Strategic Partnership at State Street Investment Management, said that with this launch, they were expanding their liquid credit partnership with Blackstone beyond the US.

“We are excited to bring Blackstone’s historical expertise in CLOs to the European market via the UCITS ETF structure, as we continue to democratize investing by helping reduce barriers to entry into this historically hard-to-access area of the market,” he added.

Michael Sobol, Global Head of CLO investing for Blackstone Credit & Insurance, said that the European credit market offers a robust and attractive set of investing opportunities. This initiative builds on their 25-year presence in the region.