HSBC expands direct lending business into Europe

HSBC Asset Management has expanded its private credit offerings by extending its UK direct lending business into Europe, and launching a new infrastructure debt strategy.

The HSBC European senior direct lending strategy will act as an extension of its UK direct lending strategy, which launched in 2020. It will invest in senior secured loans to private-equity backed European middle market companies.

With the addition of this new strategy, HSBC’s direct lending platform now has more than $2.4bn (£1.82bn) in commitments, and has deployed $1.4bn to date. It has now completed its second close, with fundraising expected to continue throughout 2025.

Read more: Investec hires head of private credit management to expand direct lending platform

HSBC AM has also announced the rollout of the first vintage of its global transition infrastructure debt strategy, which will invest in senior and second lien debt, targeting mid-market borrowers in investment grade countries across Europe, North America and the APAC region. The strategy has already attracted more than $240m in client commitments.

The new launches were planned in response to increased institutional investor interest in the private credit market. HSBC has pledged to “scale up” its $6.5bn global private credit business in order to meet this demand.

Read more: HSBC Life HK to increase allocation to private credit

“The growth of our private credit platform plays an important role in our wider alternatives business,” said Scott McClurg, head of private credit at HSBC AM.

“The launch of our two new strategies demonstrates our commitment to providing clients access to potentially compelling investment opportunities both within Europe and globally.

“The extension of our direct lending offering to Europe reflects the demand we are seeing from institutional investors for a high-quality, mid-market European direct lending strategy. Our offering captures the benefits of our partnership with HSBC bank to leverage a strong pipeline of pan-European loan origination opportunities.”

Read more: Coller Capital and Abry Partners close $1.6bn credit vehicle