New York

THE riskiest portions of specialised loan funds that have helped finance the biggest buyouts in history are luring investors with returns that exceed even junk bonds.

The equity slices of US collateralised loan obligations (CLOs), which get whatever money is leftover after more senior investors are paid, returned an average 16 per cent last year, according to JPMorgan Chase & Co data on funds raised since the end of 2008. That compares with 7.4 per cent for the Bank of America Merrill Lynch US High-Yield Index of bonds.