In April 2015 we introduced the concept of the “cargo-pants strategy.” For direct lenders to compete against banks for leveraged loans, they needed to hold larger commitments.  

So managers raised #CLOs, separate managed accounts, commingled funds, and #BDCs to create loan storage pockets. They could then allocate large commitments across vehicles without any one holding an outsized position.  

As pockets were added, hold sizes grew. At the same time, the development of the #unitranche has given managers a competitive instrument to take share from loan arranging (not loan holding) banks.