Janus Henderson Launches $1 Billion Onchain CLO Strategy with Grove Protocol

Introduction to the Innovative CLO Strategy

A groundbreaking $1 billion investment has been successfully allocated to the Janus Henderson Anemoy AAA CLO Strategy (JAAA) through a newly developed decentralized finance (DeFi) protocol by Grove. This institutional-grade credit infrastructure aims to serve as a liquidity engine within the DeFi landscape.

Strategic Partnership and Approval

The capital was sourced from the Sky Ecosystem, previously known as MakerDAO, which sanctioned the investment via Grove’s protocol into JAAA. This initiative marks a significant milestone as it is believed to be the first collateralized loan obligation (CLO) strategy to be fully operational onchain, developed in collaboration with Centrifuge. The management team behind this strategy includes the same experts who oversee Janus Henderson’s $21 billion AAA CLO ETF.

Management and Investment Focus

The JAAA strategy is actively managed by portfolio managers John Kerschner, Nick Childs, and Jessica Shill. It focuses on investing in high-quality CLOs, aiming to achieve substantial yields while maintaining quality and avoiding extended durations. According to officials, this strategy provides global onchain investors with an institutional-grade investment option that prioritizes capital preservation alongside attractive returns.

Growing Demand for Onchain Assets

Sam Paderewski, co-founder of Grove Labs, highlighted the increasing interest in traditional finance (TradFi) asset classes within the DeFi space. He noted the rapid growth of tokenized treasuries, which surged from $500 million to $7.3 billion in 2023, as more assets transition to onchain platforms.

Expanding Asset Diversity in DeFi

Anil Sood, chief strategy and growth officer at Centrifuge, emphasized the rising demand for a broader range of high-quality assets in the DeFi ecosystem. He stated that, rather than merely wrapping an offchain ETF, the collaboration with Janus Henderson has enabled the complete onchain integration of JAAA. This transition unlocks operational efficiencies, minimizes intermediary costs, and broadens access for a diverse range of capital allocators.

Flexibility Between Financial Environments

Paderewski mentioned that this development allows investors the flexibility to switch between yield opportunities in both TradFi and DeFi environments.

Grove’s Role in the Decentralized Ecosystem

Grove operates within the decentralized Sky Ecosystem and is a subsidiary of Steakhouse Financial, co-founded by Mark Phillips, Kevin Chan, and Paderewski. Steakhouse Financial is also collaborating with the Sky Ecosystem to innovate by integrating real-world assets (RWAs) into DeFi. The firm specializes in capital formation, credit structuring, risk management, and strategic advisory services for clients across both TradFi and DeFi sectors.

The Future of Financial Integration

Paderewski, who previously worked at Hildene Capital Management before joining Steakhouse in 2022, remarked on the timely launch of Grove as TradFi and DeFi converge. He expressed excitement about the potential for CLOs to transition into DeFi due to their appealing yield characteristics and structure, and he looks forward to the partnership with Janus Henderson and Centrifuge.

Janus Henderson’s Commitment to Innovation

Janus Henderson expressed pride in being part of this innovative launch, especially as their AAA CLO strategy has attracted significant inflows, reaching $20 billion after its inception in 2024. By the end of 2024, JAAA had grown to $16.6 billion, reflecting strong investor interest.

Meeting Investor Demand for Fixed Income Products

Executives noted that this initiative is another avenue to satisfy the increasing demand for new fixed-income products among investors.

Vision for the Future

Nick Cherney, head of Innovation at Janus Henderson Investors, shared his enthusiasm for the collaboration with Grove and Centrifuge, emphasizing their shared vision for the future of blockchain technology in transforming traditional finance. He expressed optimism about the long-term partnership and the significant step forward in integrating RWAs into DeFi through the onchain launch of this actively managed credit strategy.

Looking Ahead

Currently, Grove is exploring future offerings that encompass both onchain and offchain assets. Among its existing products is the BUIDL or BlackRock USD Institutional Digital Liquidity Fund, showcasing the company’s commitment to innovation in the financial landscape.

Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. Readers are encouraged to conduct their own research before making any investment decisions.