Hayfin Scraps $6.5 Billion Cap on Direct Lending Fundraising Bid

Hayfin Capital Management LLP will lift the limit on its latest 5.5 billion-euro ($6.5 billion) round of fund-raising to tap demand from companies for its direct loans.

The London-based private credit firm invoked a clause in the terms regulating its fund-raising that lets it exceed the cap if its investments reach a certain level, said one of the people with knowledge of its activities, who asked not to be identified because the information is private.

The pandemic has provided a boost to private credit, one of Europe’s fastest growing forms of finance. Non-bank lenders sealed a slew of deals in 2020, including the largest ever direct loan, a $2 billion credit lined up by private credit funds led by Ares Management LLC in June. The industry is on course to provide $100 billion of financing this year, according to the Alternative Credit Council, an industry lobby group.

A spokesman for Hayfin declined to comment on its fundraising plans.

Hayfin hit its initial limit in May with 4.5 billion euros raised for its third direct lending fund and another 1 billion euros in separately managed accounts focused on the same strategy. So far, Hayfin has deployed 4 billion euros of that capital, of which a record 2.4 billion euros was invested this year, the person said.

Hayfin has now invited existing investors to increase their commitments and also new ones to join, the people said. The three-year deployment period, during which the fund can invest before waiting for deals to be repaid or refinanced, will not be extended, said one of the people.

Hayfin Scraps $6.5 Billion Cap on Direct Lending Fundraising Bid

In the third quarter travel restrictions and limits on in-person meetings caused by the pandemic put the brakes on European private credit fund-raising.

But that pause looks to be over with Hayfin pitching for more investment to join other large funds in the market. Ares Management’s latest European direct lending vehicle is the firm’s biggest-ever fund with a 9 billion-euro target.

©2020 Bloomberg L.P.

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