Navigating CLO Arbitrage and Tail Risk in 2026

LFI Levered Lines Podcast | Season 3, Episode 6

This week on Levered Lines, host Kerstin Kubanek speaks with Dagmara Michalczuk, Co-Chief Investment Officer at Tetragon Credit Partners, ahead of the Deal Catalyst European Direct Lending Conference. They discuss CLO market dynamics in 2026, including spread compression reaching post-financial crisis tights and the outlook for refinancing and reset activity. The conversation covers CLO equity arbitrage opportunities, tactical positioning strategies, loan repricing trends, and portfolio quality amid micro cycles in the market. Key themes include sector-specific concerns around software and AI disruption, chemicals, autos, building products, as well as evolving restructuring trends, liability management exercises, cross-border litigation developments, and challenges in manager selection.

Join Dagmara Michalczuk at the European Private Credit Conference on Direct Lending
23 February 2026 | The Landmark Hotel | London, U.K.
Dagmara will be speaking at this event. Register here: https://hubs.la/Q042jP1D0

Watch on YouTube:

Speakers:

Kerstin Kubanek, Senior Reporter, LevFin Insights:
Kerstin covers the European private credit market. She worked for a variety of international news outlets such as Yahoo Finance and CNBC, amongst others, in the UK and Germany.

Dagmara Michalczuk, Co-Chief Investment Officer, Tetragon Credit Partners:
Dagmara is responsible for directing investment strategy and portfolio oversight across CLO equity and credit investments.

Timestamps:

00:00 – Introduction
00:56 – 2026 CLO Market Outlook
04:00 – CLO Equity Arbitrage Dynamics
06:28 – Portfolio Quality and Sector Risks
09:45 – Investment Strategy and Positioning
12:02 – Restructuring and Litigation Trends
13:42 – Conclusion & Key Takeaways