HSBC Asset Management has introduced a UK-focused direct lending capability in partnership with HSBC UK Bank.
The launch is said to be in line with the firm’s plans to develop an alternative investments platform.
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The team will be led by HSBC Asset Management head of investment for UK mid-market credit Tom Green.
He will be supported by five mid-market credit investment executives and the company’s credit research capabilities and infrastructure.
While HSBC Asset Management will manage asset selection, HSBC UK will provide the origination pipeline for the new capability.
It will work exclusively with the bank to extend new senior secured loans to borrowers with EBITDA of £5m to £50m.
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By GlobalDataMoreover, the partnership will enable HSBC to offer additional capital to mid-market companies and their private equity owners with larger senior secured loans.
The new initiative targets profitable, cash generative private equity backed mid-market companies with conservative leverage, it said.
Commenting on the development, HSBC Asset Management Global Private Debt and Real Assets CIO Dominic Swan said: “Private debt is a key area of focus for HSBC Asset Management. This partnership allows us to access all eligible loan opportunities originated by HSBC UK, and participate in those that best meet our clients’ needs.
“This innovative approach combines the skill and experience of HSBC Asset Management’s UK Mid-Market investment team, and the unparalleled market position of HSBC UK.”
HSBC Asset Management head of Institutional Sales for the UK, Scandinavia and the Middle East Maria Ryan added: “Private debt is one of the fastest growing asset classes, particularly with UK Pension Funds and insurers seeking enhanced yield, stable cashflows and diversification. This capability provides access to private debt assets with an attractive yield premium that are traditionally hard to source.”
Earlier this month, it was reported that HSBC is setting up a new private banking business in Thailand to boost its presence in the Southeast Asian wealth management space.
