HPS Investment Partners Raises €800M For Debut European Specialty Finance Fund

Jan 5 2017 | 7:59pm ET

HPS Investment Partners has raised €800 million in capital commitments for its maiden European credit fund. 

The new vehicle, named the European Asset Value Fund, will seek to take advantage of strategic shifts in the European specialty finance sector, the company said. It hopes to capitalize on the regulatory-induced deleveraging that is leading banks to divest of capital intensive and non-core portfolios and platforms.

Specifically, the fund will invest in leases and loans backed by assets and receivables, including equipment, information technology, automobiles, aircraft, trucks and other transportation assets, HPS said. Acquiring and developing scalable platforms will also allow the new fund to source new assets and provide direct financing to European small and medium-sized enterprises and consumers.

The management team has more than 40 years of experience investing across a broad array of financial and real-asset platforms, HPS added, and will focus on building a diversified portfolio of performing assets, as well as origination and infrastructure. 

"We appreciate the confidence that our investors have placed in the fund's investment strategy and our ability to identify and capitalize on unique opportunities," said Jonathan Ashley and Justin Staadecker, co-portfolio managers of HPS's European Asset Value Fund. "We believe that the current market conditions in Europe will afford us the opportunity to acquire a highly diverse pool of performing assets alongside related origination and servicing platforms."

"Regulatory induced deleveraging of the European banking sector has created a strategic opportunity to acquire performing non-core asset portfolios and platforms,” added Scott Kapnick, CEO of HPS. “[This] gives investment firms such as HPS the ability to disintermediate the historical control banks have held over the financing markets in Europe. 

The fund launch comes close on the heels of the debut of HPS’s third mezzanine fund, a mammoth $6.6 billion vehicle that closed in December 2016 and which will invest primarily in junior debt and equity securities across a broad set of North American and Western European industries.

Founded in 2007 as a the unit of JP Morgan Asset Management’s Highbridge Capital Management and known as Highbridge Principal Strategies, HPS Investment Partners is a New York-based investment manager focusing on non-investment grade credit. In March 2016, the principals of HPS acquired the firm from J.P. Morgan, which retained Highbridge's hedge fund strategies. As of December 2016, HPS has approximately $34 billion of assets under management deployed across public and private credit, direct lending and leveraged loan strategies.

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