Canadian investor taking majority Hayfin stake

bcIMC is buying into Hayfin itself as well as committing capital to its funds. Four current shareholders are selling their positions.

British Columbia Investment Management (bcIMC), the Canadian institutional investor, has agreed to acquire a majority stake in Hayfin Capital Management, the London-headquartered private debt fund manager.

The exact size of the stake in the fund manager has not been disclosed, but bcIMC is taking over all of the shares that were previously owned by four existing shareholders: London and New York private equity firm Towerbrook Capital Partners; Canadian pensions PSP Investments and Ontario Municipal Employees Retirement System; and Future Fund, the Australian sovereign wealth fund.

It is understood that, after seven years of being invested, Towerbrook was keen to exit its position. PDI also understands that both Future Fund and OMERS will remain investors in Hayfin’s direct lending and special opportunities strategies following the deal. Hayfin declined comment on this, and the new and existing shareholders could not be immediately reached.

Hayfin said that its management and employees would remain shareholders alongside bcIMC. The firm also said that it would retain its independence, with all operational, investment and personnel activities continuing to be the responsibility of the Hayfin team.

An announcement said that bcIMC would commit “significant capital to the funds that Hayfin currently manages” and would support the future development of the business.

“This long-term investment from bcIMC will provide the access to capital and streamlined ownership structure to realise our ambition of becoming Europe’s leading credit platform,” said Tim Flynn, chief executive officer of Hayfin.

The financial terms of the deal were undisclosed, and the transaction remains subject to regulatory approval.

Hayfin has €8.2 billion under management and was 18th in last year’s PDI 30 ranking of the largest capital raisers in the asset class. Focused on Europe, it was founded in 2009. Broadly focused on direct lending and special opportunities, its activities also cover liquid credit, maritime finance, healthcare and alternative credit.

According to PDI data, the firm’s Special Opportunities Fund II, which has a target of €1.5 billion, posted a first close on €700 million, including a $200 million commitment from the Pennsylvania Public School Employees’ Retirement System. Its Direct Lending Fund II, with a €2.25 billion target, posted a €1.2 billion first close including $100 million from the Tennessee Consolidated Retirement System.

The firm’s closed funds include the circa €1 billion Special Opportunities Credit Fund (2013 vintage) and the €2.03 billion Direct Lending Fund (2014).

bcIMC, which is based in Victoria, British Columbia, has C$122 billion of managed net assets and is one of Canada’s largest institutional investors. It invests in all major asset classes on behalf of public sector pension plans, public trusts and insurance funds.