Wed, 16/05/2018 - 10:42
Hermes Investment Management (Hermes), the GBP33.0 billion manager, has launched the Hermes European Direct Lending Fund, which is managed by Patrick Marshall, Head of Private Debt & CLOs.
The European Fund follows the successful launch of the UK Direct Lending Fund in 2016.
The Fund offers access to the stable, low-correlated returns from high-quality, senior-secured loans to a diverse range of middle-market businesses in the UK and Europe, with a focus on Scandinavia, Germany, Benelux and Ireland.
Senior-secured transactions are originated through co-lending partnerships with Danske Bank, DZ Bank and KBC Bank, which sit alongside the existing UK mid-market agreement in place with Royal Bank of Scotland. As some of the largest mid-market lenders in their respective regions, the agreements provide investors access to a strong deal flow, with attractive opportunities across a wide range of sectors. Further to this, the team’s broad network of contacts among private equity firms, banks and borrowing businesses creates an additional source of origination across Europe.
A diversified portfolio of mid-market loans provides a number of potential benefits to investors. These include the provision of a strong yield and stable returns, coupled with protection against downside risk and inflation hedging characteristics. Lastly, low mark-to-market volatility provides stability to a diversified portfolio.
Patrick Marshall, Head of Private Debt & CLOs, Hermes Investment Management, says: “The strength of our partnerships with Europe’s leading banks, combined with our own origination skills, sustain a strong pipeline of high-quality loans for our investors.
“By focusing the Fund on attractive, senior-secured loans in the mid-market space, we can ensure there are strong creditor protections in place. Our aim will be to consistently outperform for our investors by lending to quality, growing businesses on terms seeking capital preservation and yield capture.”
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