OTPP Backs M&G Investments to Support the Expansion of European CLO Platform
Ontario Teachers’ Pension Plan has entered into a joint venture with M&G Investments to support the scaling of its European collateralised loan obligation (CLO) platform.
The scheme has agreed to provide investment capacity of up to €200m for equity investments in future M&G Margay CLO issuances, and to participate in the long-term economics of M&G’s European CLO business and support the growth of the platform.
M&G said the investment would support its operations in European private assets for global institutional investors.
Through the combination of M&G’s credit research and investment capabilities in European broadly syndicated loans with Ontario Teachers’ institutional CLO investment experience and capital, the collaboration will look to support platform growth while providing strong returns.
The capital will be deployed on an investment-by-investment basis in accordance with the agreed investment framework.
M&G’s Margay platform is led by head of private corporate credit, Fiona Hagdrup, and manages €1.6bn of CLO assets.
“The European CLO market continues to offer compelling opportunities for long-term investors, supported by a large and diverse pool of underlying senior loans,” said Hagdrup.
“While market conditions may evolve, a disciplined, selective approach to credit remains key.
“Our focus on fundamental analysis, ESG risk mitigation, relative value and portfolio construction positions us well to navigate different phases of the cycle and deliver resilient outcomes.”
Ontario Teachers’ Pension Plan senior managing director, credit, Michael Merkoulovitch, added: “M&G is a valued partner to Ontario Teachers’ within the structured credit space. We share a common investment philosophy and disciplined approach to risk.
“We believe the European CLO equity market is an attractive asset class that complements and diversifies our existing CLO equity programme and are pleased to expand our relationship with M&G.
“With a strong alignment of interest and shared conviction in the opportunity, we look forward to working closely with M&G to grow Margay into one of Europe's leading CLO platforms."
Ellie Duncan of Alternative Credit Investor also reports M&G forms Ontario Teachers’ Pension Plan JV to grow CLO platform:
M&G Investments has formed a joint venture with Ontario Teachers’ Pension Plan to scale its European collateralised loan obligation (CLO) platform, Margay.
The $279.4bn (£210.1bn) defined benefit pension scheme has agreed to provide investment capacity of up to €200m (£171m) for equity investments in future M&G Margay CLO issuances, and to participate in the long-term economics of M&G’s European CLO business and support the platform’s continued growth.
The joint venture aims to support “disciplined” platform growth, while delivering attractive risk-adjusted returns across market cycles, with capital to be deployed on an investment-by-investment basis, in accordance with the agreed investment framework.
M&G’s €27bn structured and private credit platform includes the Margay CLO programme.
Launched in 2023, M&G’s Margay CLO platform is led by head of private corporate credit, Fiona Hagdrup, and manages €1.6bn of CLO assets within a broader €10bn loan platform.
Hagdrup said the European CLO market continues to offer “compelling opportunities” for long-term investors, supported by a large and diverse pool of underlying senior loans.
The CLO platform has also benefitted from capital from M&G’s Life business, which has invested more than £1bn in structured credit strategies over time.
“Our European platform is underpinned by disciplined credit selection and a long-term investment approach,” said James King, head of private and structured credit at M&G Investments. “Access to aligned long-term capital and the expertise of Ontario Teachers’ provides a strong foundation to scale the Margay programme over time, broadening our investor base and enabling us to deploy into opportunities as they arise, while continuing to deliver attractive risk-adjusted returns for our clients.”
“We believe the European CLO equity market is an attractive asset class that complements and diversifies our existing CLO equity programme and are pleased to expand our relationship with M&G,” added Michael Merkoulovitch, senior managing director, credit at Ontario Teachers’ Pension Plan. “With a strong alignment of interest and shared conviction in the opportunity, we look forward to working closely with M&G to grow Margay into one of Europe’s leading CLO platforms.”
On Monday, OTPP issued a press release stating it has partnered with M&G Investments (M&G), announcing a €200 million strategic investment in a CLO platform:
London, 27th July 2026: M&G Investments (M&G) and Ontario Teachers’ Pension Plan (Ontario Teachers’) - a leading global institutional investor - have agreed to a joint venture to support the scaling of a multi-billion European collateralised loan obligation (CLO) platform. The investment supports M&G’s ambition to be a leader in European private assets for institutional investors globally through its €93 billion Private Markets business¹.
Ontario Teachers’ has agreed to provide investment capacity of up to €200 million for equity investments in future M&G Margay CLO issuances as well as participate in the long-term economics of M&G’s European CLO business and support the continued growth of the platform.
By combining M&G's track record, in-house credit research and investment expertise in European broadly syndicated loans with Ontario Teachers’ institutional CLO investment experience and capital, the joint venture will support disciplined platform growth while delivering attractive risk-adjusted returns across market cycles. Capital will be deployed on an investment-by-investment basis in accordance with the agreed investment framework.
M&G has a 25-year track record investing in structured and private credit with a platform that has grown to €27 billion, which includes the Margay CLO programme. M&G’s Margay platform is led by Head of Private Corporate Credit, Fiona Hagdrup, supported by a team with extensive experience in European corporate credit and structured finance. It currently manages €1.6 billion of CLO assets within a broader €10 billion loan platform, complemented by M&G’s wider structured credit capabilities. The platform also benefits from capital from M&G’s Life business, which has invested more than £1 billion in structured credit strategies over time.
James King, Head of Private & Structured Credit at M&G Investments, said:
“This investment reflects the strength of our approach and track record in CLOs across market cycles. Our European platform is underpinned by disciplined credit selection and a long-term investment approach. Access to aligned long-term capital and the expertise of Ontario Teachers’ provides a strong foundation to scale the Margay programme over time, broadening our investor base and enabling us to deploy into opportunities as they arise, while continuing to deliver attractive risk-adjusted returns for our clients.”
Michael Merkoulovitch, Senior Managing Director, Credit, Ontario Teachers’ Pension Plan, said:
“M&G is a valued partner to Ontario Teachers’ within the structured credit space. We share a common investment philosophy and disciplined approach to risk. We believe the European CLO equity market is an attractive asset class that complements and diversifies our existing CLO equity programme and are pleased to expand our relationship with M&G. With a strong alignment of interest and shared conviction in the opportunity, we look forward to working closely with M&G to grow Margay into one of Europe's leading CLO platforms."
Fiona Hagdrup, Head of Private Corporate Credit at M&G Investments, said:
“The European CLO market continues to offer compelling opportunities for long-term investors, supported by a large and diverse pool of underlying senior loans. While market conditions may evolve, a disciplined, selective approach to credit remains key. Our focus on fundamental analysis, ESG risk mitigation, relative value and portfolio construction positions us well to navigate different phases of the cycle and deliver resilient outcomes.”
Note to editors: ¹M&G as of 31 March 2026
About M&G ’s Margay Platform
Launched in 2023 and with €1.6 billion currently in issue, M&G’s CLO platform, ‘Margay’, complements the firm’s nearly three decades in European corporate lending and Structured Credit. Margay delivers the same, conservative, fundamental approach that defines M&G, leaning on its deep resources and track record in fundamental credit and structured finance. Attention to Environmental, Social and Governance risk mitigation - long part of the approach - has bolstered resilience.About M&G Investments
M&G Investments is part of M&G plc, a savings and investments company with £371 billion of assets under management (as at 31 March 2026). M&G plc has customers in the UK, Europe, the Americas and Asia, including individual savers and investors, life insurance policy holders and pension scheme members.For nearly nine decades M&G Investments has been helping its customers to prosper by putting investments to work, which in turn creates jobs, homes and vital infrastructure in the real economy. Its investment solutions span equities, fixed income, multi asset, cash, private debt, infrastructure and real estate.
M&G plc recognises the importance of responsible investing, is a signatory (both as an asset manager and owner) to the UN-supported Principles for Responsible Investment (PRI), and is targeting net zero emissions by 2050, across our investment portfolios and operations. For more information, please visit: www.mandg.com
About Ontario Teachers’
Ontario Teachers' Pension Plan Board (Ontario Teachers') is a global investor with net assets of $279.4 billion as at December 31, 2025. Ontario Teachers’ is a fully funded defined benefit pension plan, and it invests in a broad array of asset classes to deliver retirement security for 346,000 working members and pensioners. For more information, visit otpp.com and follow us on LinkedIn.
Basically, M&G Investments has established a joint venture with Ontario Teachers’ Pension Plan to support the scaling of a multi-billion-Euro CLO platform.
Launched in 2023, M&G’s Margay CLO platform is led by head of private corporate credit, Fiona Hagdrup, and manages €1.6bn of CLO assets within a broader €10bn loan platform.
Hagdrup said the European CLO market continues to offer “compelling opportunities” for long-term investors, supported by a large and diverse pool of underlying senior loans.
Michael Merkoulovitch, Senior Managing Director, Credit, OTPP, clearly states why they are funding this joint venture:
“M&G is a valued partner to Ontario Teachers’ within the structured credit space. We share a common investment philosophy and disciplined approach to risk. We believe the European CLO equity market is an attractive asset class that complements and diversifies our existing CLO equity programme and are pleased to expand our relationship with M&G. With a strong alignment of interest and shared conviction in the opportunity, we look forward to working closely with M&G to grow Margay into one of Europe's leading CLO platforms."
For those of you who are not aware, European CLO issuance hit a record high in the first half of 2026 (see details here).
Underpinning this soaring activity are higher rates and increased trade volatility. There are a huge number of refinancings and resets and the appetite for European CLOs is growing (see DB research here).
OTPP is backing M&G Investments' CLO platform because it trusts their capabilities in this area and their disciplined approach to risk.
Fiona Hagdrup, Head of Private Corporate Credit at M&G Investments, featured at the top of this post, is impressive and knows her subject matter very well.
In a 2025 interview with the Korea Economic Daily, she stated this:
With deal pipelines reopening and institutional demand remaining robust, Hagdrup sees the European broadly syndicated loan (BSL) market entering a phase of more balanced supply and demand.
“It’s more balanced than it was at the start of the year,” she said. “There is huge demand for broadly syndicated loans, given their lack of rate duration and significantly higher yield than public bonds.”
She pointed to the CLO, or collateralized loan obligation, market as a stabilizing force.
“With the pickup in issuance activity, supply and demand are settling down into an equilibrium,” she said.
“To some extent, the CLOs underpin the yield of the broadly syndicated loans, and their arbitrage needs demand that loans contribute, 4% plus over risk-free rates in their return.”
That dynamic, she added, helps preserve loan spreads and supports long-term value for institutional investors.
She obviously knows what she's talking about, and now with OTPP as a partner, I'm confident this will be a highly successful joint venture to capitalize on opportunities in the European CLO market.
Below, John Kerschner and Matthew Bullock of Janus Henderson Investors discuss how CLOs combine diversification, liquidity and floating‑rate exposure. They highlight why active global management can be critical to achieving differentiated outcomes.
Listen carefully as they demystify CLOs and explain in plain English their attraction to institutional investors looking to invest in a portfolio of high-quality securitized corporate loans.
Comments
Post a Comment