HSBC Asset Management has held a final close above target for its second UK direct lending vintage, raising $2 billion in commitments from institutional investors across the fund and associated mandates. The second fundraise is approximately twice the size of the first, supported by a combination of repeat and new commitments from a globally diverse institutional investor base across Europe, Asia, and North America, including from within the HSBC Group. The re-up rate among first-vintage investors exceeded 100%.
The strategy invests alongside HSBC UK Bank plc in senior secured loans to private equity-backed companies in underserved low- to core-middle-market segments, targeting high-growth and resilient borrower profiles. It is built around disciplined underwriting and conservative loan structures, with transactions typically featuring three- to four-times leverage, robust maintenance covenants, and equity cushions of approximately 70%. An exclusive sourcing partnership with HSBC UK Bank plc provides investors with access to a market-leading origination network, supporting disciplined deployment and diversified portfolio construction across the UK middle market.
The strategy sits within HSBC AM’s Alternative Credit platform, which offers institutional investors access to capabilities across direct lending, infrastructure debt, and capital solutions. The final close marks a significant milestone in HSBC AM’s buildout of its direct lending offering as institutional demand for resilient income and downside protection in the current market environment continues to grow.
KEY QUOTES:
“This marks an important milestone in the buildout of our direct lending offering. The strong client support reflects the appeal of our conservative investment approach, which has resonated with institutional investors seeking resilient income and downside protection in the current market environment.”
Tom Green, Head of Direct Lending, HSBC Asset Management
“We are grateful to our investors for the continued trust that they place in us to help meet their long-term investment objectives. The strong support from existing clients has been particularly encouraging, with a re-up rate of over 100 per cent from the first vintage.”
Michelle Dunne, Head of European Institutional Sales and Alternatives Sales Lead, HSBC Asset Management
