The complex funds that have driven investment in loans for private equity buy-outs have performed better than corporate debt historically and can withstand severe default rates in the broader market, according to a study by Moody’s.

The funds, collateralised loan obligations (CLOs), which pool together groups of risky leveraged loans and raise funds by selling differently rated slices of debt, have seen values tumble across the board during the credit crisis in common with other structured products.