Direct-Lending Giant Set to Hit $5.9 Billion Fundraising Limit

(Bloomberg) -- Hayfin Capital Management LLP is close to completing a fundraising round aimed at deploying 5.5 billion euros ($5.94 billion) in direct loans to companies, according to people familiar with the situation.

The London-based credit manager is also courting investors for a third special opportunities credit fund with a 2.5 billion-euro target size. Fundraising for it was underway ahead of the recent rout in credit markets caused by the coronavirus pandemic, the people said. The strategy provides capital in situations in which funding may be scarce including corporate rescues and restructurings as well as bids to buy non- or under-performing loans.

Direct lenders are increasingly taking market share from the European banks that have traditionally supplied companies with credit. Investors have piled into European direct lending in recent years with a number of investment firms growing large enough to raise billions of euros in funds including Alcentra Capital Corp., Arcmont Asset Management, Ares Management LLC, and Intermediate Capital Group as well as Hayfin.

Direct-Lending Giant Set to Hit $5.9 Billion Fundraising Limit

The latest direct lending fund is Hayfin’s third and includes 4.5 billion euros in a pooled fund with another 1 billion euros of separately managed investor money targeting the same strategy. The 5.5 billion-euro total means the firm has hit the upper limit it set earlier in the fund-raising process, the people said.

The cash will be mostly invested in loans to private equity-owned mid-market companies in Europe. Investors in the new fund include the U.K.’s Staffordshire County Council Pension Fund and Fire and Police Pension Fund, San Antonio, according to data compiled by Bloomberg.

A spokesman for Hayfin declined to comment on the fundraising.

Hayfin was founded in 2009 and has since invested 17 billion euros across more than 300 companies, according to its website.

©2020 Bloomberg L.P.

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