New York-based HPS Investment Partners is limiting inflows for its $10bn HPS Corporate Lending Fund in response to a surge in demand for private credit, according to a report by Bloomberg.
This unusual move is expected to reduce contributions from its main distributor, JPMorgan Chase & Co, according to Bloomberg’s sources.
Investors who are unable to contribute due to the cap — primarily wealthy individuals — will reportedly be placed on a waitlist.
Despite the potential loss of fees associated with new capital, HPS is betting that this cap will provide it with the flexibility to reject unattractive deals, thereby enhancing returns in the long run.
From March onwards, JPMorgan has reduced its monthly contributions to the HPS Corporate Lending Fund to approximately $150m-$200m, a significant decrease from the previous monthly total of about $200m-$500m, Bloomberg’s sources said.
HPS focuses on debt and equity investments including loan, mezzanine, credit opportunities, private equity and real assets, according to Preqin.
HPS, formerly known as Highbridge Principal Strategies, was founded in 2007 as a private equity and credit investment division of Highbridge Capital Management within JP Morgan Asset Management. The firm oversees $112bn in AUM as of March 2024 and maintains offices in North America, Europe, the Middle East and Asia-Pacific, according to its website.
