Coller Capital is in the process of structuring a $1bn collateralised fund obligation (CFO) backed by interests in several of its private capital secondary portfolios, marking the firm’s second such transaction this year, according to a report by Bloomberg citing sources familiar with the matter.
Citigroup is leading the structuring of the CFO, which is expected to comprise both debt and equity tranches. Wells Fargo is acting as joint placement agent alongside Citi, the sources added.
The transaction, which remains in the structuring phase, is subject to change.
The move comes amid growing demand for fund finance solutions as private equity firms seek alternative liquidity sources in a slower exit environment. CFOs – structured vehicles that securitise cash flows from diversified fund stakes – have gained traction among institutional investors, particularly insurers, who benefit from capital-efficient exposure to private markets through rated instruments.
Last month, Coller Capital priced a $2.4bn CFO that attracted commitments from institutional investors including Barings and Ares Management. Other recent issuers in the space include Neuberger Berman, Carlyle’s AlpInvest Partners, and Thrivent.
