Blackstone and State Street Investment Management are joining forces to introduce an exchange-traded fund focused on European collateralized loan obligations (CLOs). The new product, called the State Street Blackstone Euro AAA CLO UCITS ETF, will provide investors with exposure to floating-rate, triple-A-rated, euro-denominated CLOs. The move reflects growing interest in broadening investor participation in private markets and diversifying income streams in Europe’s €250 billion CLO market.

Blackstone, the world’s largest manager of CLOs and leveraged loans, will actively manage the securities, while State Street will be responsible for distributing the product to investors. The ETF is expected to list on several major European exchanges, including Deutsche Boerse Xetra, Borsa Italiana SpA, and the London Stock Exchange. According to the firms, the product aims to open up access to an asset class that has delivered consistently high yields with relatively low duration risk.

State Street’s Ann Prendergast noted that the ETF is designed to give European investors diversified exposure to CLOs, which have historically appealed to global banks due to their floating-rate structure. This characteristic has helped drive demand, especially from major US and Japanese lenders, who see CLOs as a way to secure higher returns while interest rates remain elevated. The partnership marks one of the first actively managed CLO ETFs in Europe, highlighting a significant shift in how institutional and retail investors can access this corner of the credit market.

The European launch follows the growing popularity of CLO ETFs in the United States. For instance, Janus Henderson’s triple-A CLO ETF has already amassed more than \$21 billion in assets under management, while other firms such as Fair Oaks Capital have also rolled out their own vehicles in Europe. With the introduction of the State Street Blackstone Euro AAA CLO UCITS ETF, investors in Europe will gain similar opportunities to tap into top-rated CLO paper without directly participating in the private loan market.

Blackstone and State Street have a history of collaboration, dating back to the 2013 launch of the SPDR Blackstone Senior Loan ETF, which was the first actively managed ETF providing exposure to senior loans. Their latest effort demonstrates both firms’ commitment to expanding investment options in Europe’s leveraged finance space. As demand for floating-rate, high-yield products continues to rise, the new ETF could attract significant attention from institutions and private investors seeking alternatives in a challenging economic environment.

Source: Bloomberg.