a) Background
1988 Asset Management, LLC (“1988 Asset Management” or the “Firm”) is a Delaware limited
liability company established on February 23, 2022. 1988 Asset Management is a wholly owned
subsidiary and related adviser of Muzinich & Co., Inc. (“Muzinich”). Muzinich is a global institutional
asset manager specializing in corporate credit investment portfolios and other credit-based investment
strategies. Each of Muzinich and 1988 Asset Management is an SEC registered investment adviser.
Registration with the SEC does not imply a certain level of skill or training. Muzinich has been
offering investment advisory services since 1988. George M. Muzinich is the founder and Executive
Chairman and is the principal owner of Muzinich. The term “Muzinich Group” means, collectively,
Muzinich, 1988 Asset Management and their affiliates, as outlined in Item 10 – Other Financial
Industry Activities and Affiliates. A client of 1988 Asset Management (as discussed in subsection b
below) is referred to herein as a “1988 Asset Management CLO” or “Client.” A client of the Muzinich
Group (as discussed in subsection b below), including, for avoidance of doubt, a 1988 Asset
Management CLO, is referred to herein as a “Muzinich Group Client.”
b) Advisory Services
1988 Asset Management provides discretionary investment advisory services as a collateral manager
to one or more collateralized loan obligation vehicles (“CLOs”). 1988 Asset Management’s clients
are generally pooled investment vehicles that are CLOs that invest principally in U.S. dollar-
denominated senior secured loans. However, the Firm could also invest in other loan types including
but not limited to, second lien loans, unsecured term loans, bridge loans, delayed draw term loans,
debtor-in-possession (DIP) loans, revolving loans and letter of credit facilities, notes, high yield
bonds, and bonds with attached warrants. 1988 Asset Management also implements and manages
CLOs that are in the warehousing phase, warehouses or similar facilities established in anticipation
of the launch of a CLO (collectively, “Warehouses”). See Item 8 – Methods of Analysis, Investment
Strategy, and Risk of Loss, for a brief discussion of the Firm’s strategy.
For reference, the Muzinich Group provides discretionary investment advice and management, either
directly or as a subadviser, to various onshore and offshore (i) investment funds, (ii) separately
managed accounts, and (iii) CLOs. The Muzinich Group primarily advises on investments in
corporate credit, primarily bonds and loans.
The Muzinich Group applies a research-intensive approach to investing in debt issued by corporate
borrowers. The Muzinich Group applies fundamental financial and qualitative analysis to uncover
opportunities to provide Muzinich Group Clients with yield and potential capital appreciation in a
risk-aware framework. Some of the company factors the Muzinich Group evaluates include industry
dynamics, company strengths and weaknesses, free cashflow generation, debt load, asset coverage,
governance quality and skill, transparency of disclosure, regulatory constraints, outstanding
controversies, and the quality of covenants and other
protections offered investors.
From time to time 1988 Asset Management enters into arrangements with certain investors in 1988
Asset Management CLOs that grant such investors special or more favorable rights that are not
available to all investors. Such special or more favorable rights could include, but are not limited to
(i) different fee arrangements; (ii) additional reporting and/or greater access to certain information;
and (iii) opportunities to meet or speak with 1988 Asset Management’s investment team. Moreover,
1988 Asset Management shares a portion of its fees with one or more investors in certain 1988 Asset
Management CLOs.
c) Tailored Advice and Client-Imposed Restrictions
At inception of a 1988 Asset Management CLO, specific asset criteria (e.g., credit quality,
diversification) are established, sometimes in negotiation with prospective 1988 Asset Management
CLO investors. The Firm manages each 1988 Asset Management CLO subject to the powers, duties
and limitations described in the collateral management agreement entered into between 1988 Asset
Management and the 1988 Asset Management CLO and the indenture governing the 1988 Asset
Management CLO. The investment objectives and strategy employed, and related restrictions,
guidelines and risks associated with, an investment in a 1988 Asset Management CLO are described
in the governing documents such as the confidential offering circular, indenture, collateral
management agreement, and/or other relevant documents relating to an investment in a 1988 Asset
Management CLO (collectively, the “Governing Documents”) which are made available to Clients
and investors only through 1988 Asset Management or another authorized party for the applicable
1988 Asset Management CLO. Potential investors must consider whether a particular 1988 Asset
Management CLO is appropriate to their own circumstances based on all relevant factors including,
but not limited to, their own investment objectives, liquidity requirements, tax situation and risk
tolerance. Prospective clients and investors are strongly encouraged to undertake appropriate due
diligence, including but not limited to, a review of relevant Governing Documents and the additional
details about 1988 Asset Management’s investment strategy, methods of analysis, and related risks
in Item 8 – Methods of Analysis, Investment Strategy and Risk of Loss, before making an investment
decision.
d) Wrap Fee Disclosure
Not applicable.
e) Assets Under Management
As of December 31, 2023, the Firm had $1.37 billion in discretionary assets under management.
f) Risk Retention Compliance
Although not currently applicable to 1988 Asset Management, certain jurisdictions have imposed
requirements on sponsors of a securitization transaction, such as a CLO, to retain a specified economic
interest in the credit risk of the securitized assets (“Risk Retention Rules” and such interests the
“Retention Interests”). Should it be necessary for 1988 Asset Management to comply with such
requirements at any time, 1988 Asset Management or an affiliate of 1988 Asset Management will
acquire and hold Retention Interests.