HPS outlines $11bn close of latest fund

The $65 billion debt and private equity shop HPS Investment Partners announced the final closing of its mezzanine debt product at $11 billion, making it one of the largest dedicated mezzanine funds in the world. HPS Mezzanine Partners 2019 began investing capital in April 2019 and right now is about 50% invested. This year so far, HPS’ private credit platform has put over $12 billion to work across 54 portfolio companies. The 2019 fund had $9 billion in equity commitments, which exceeded the firm’s target equity capitalization for the offering of $8 billion. “The current investment environment continues to create opportunities for firms like HPS that have global platforms with scale to provide corporates and private investment firms with innovative and flexible capital solutions to support their strategic needs,” said Scot French, governing partner of HPS and portfolio manager for the HPS Mezzanine Partners 2019 fund. The fund is slated to invest primarily in junior debt as well as select equity-like instruments across various industries in North America and Western Europe. The investment aims are similar to its predecessor fund – Mezzanine Partners Fund III – which held its final close at the end of 2016 with $6.5 billion of commitments. That fund wound down its investment period at the end of last month. The fundraising success of the fund speaks to the popularity of private debt offerings which have attracted billions since the beginning of the pandemic. One investor coming in prior to the pandemic was the Minnesota State Board of Investment, which allocated $100 million to the latest fund. “It is clear that a broad range of institutional investors around the globe continue to express strong demand for established, non-investment grade credit platforms that offer outstanding investment talent, disciplined risk management and tailored risk/return solutions,” said Scott Kapnick, governing partner and chief executive officer of HPS. Kapnick founded HPS in 2007, which was originally formed as a unit JP Morgan Asset Management’s Highbridge Capital Management known as Highbridge Principal Strategies. In 2016, the principals of HPS bought the firm from JP Morgan, which retained Highbridge and the hedge fund strategies.

HPS outlines $11bn close of latest fund

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