In the wake of the financial crisis, many investors sold their holdings of CLOs to others, such as hedge funds. This secondary market for CLOs has remained active since then.
The secondary market provides investors with the ability to sell reasonably easily an investment which had previously been highly illiquid. It also gives investors useful information about the value of their holdings.
Secondary trading takes place either directly between an investment bank (dealer) and its client or through bid-wanted-in-competition (b-wic) lists.