Coller Capital has become the largest investor in a fund that invests in collaterised loan obligations, in what industry observers said was a rare move by a secondaries firm to target the CLO market.

The London-based private equity firm has bought a 20% stake in the Fair Oaks Income Fund, a $129 million vehicle listed on the London Stock Exchange that predominantly invests in CLOs of US and some European-originated loans, according to a statement from Fair Oaks.