HSBC Asset Management is making a major commitment to private credit, with Europe’s largest bank set to invest $4bn of its own capital into its alternative credit funds, as part of an ambitious strategy to build a $50bn credit platform within five years, according to a report by Reuters.
The move underscores growing institutional appetite for private credit exposure amid persistent pressure on returns from traditional lending, and marks a bold expansion effort by HSBC into a market long dominated by private equity heavyweights like Blackstone and Ares Management.
The capital injection, announced Monday, will support HSBC AM’s global private credit strategies with an initial focus on direct lending in the UK and Asia, according to Nicolas Moreau, CEO of HSBC Asset Management.
“We see this as an arms race,” Moreau told Reuters, noting that significant group backing is designed to help attract additional capital from third-party investors. The goal is to position HSBC AM as a major player in private credit, and ultimately scale to rival the largest global platforms.
While $4bn represents a small portion of HSBC’s $3tn balance sheet, the move reflects a broader pivot under Group CEO Georges Elhedery, who is focused on shifting capital toward higher-returning areas such as private credit and alternatives, rather than relying on low-margin traditional loans.
HSBC’s private credit unit, though relatively young — having launched in 2018 — has already deployed $7bn across 150 transactions. The bank aims to accelerate growth and close the gap with more established platforms by leveraging its balance sheet and global distribution capabilities.
The $2tn global private credit market continues to draw interest from banks and institutional investors alike, with firms like Citi and UBS opting to partner with alternatives giants such as Apollo and General Atlantic, while others including Deutsche Bank and HSBC are building their own dedicated credit franchises in-house.
