Exclusive: Highbridge plots European ABL strategy

The US credit and hedge fund manager is said to be targeting €1-€1.5 billion for the new commercial finance vehicle, to be managed from London.  

Highbridge Principal Strategies, the credit group of Highland Capital Management, is in the process of setting up a European asset-based lending vehicle, sources tell PDI. The firm is aiming to raise €1-1.5 billion for the strategy, to be managed by a team in London that includes managing director Justin Staadecker and portfolio manager Jon Ashley, both former Fortress Investment Group executives.

Staadecker joined Highbridge in July 2013, according to his LinkedIn profile, while Ashley came on board last summer. Both were previously managing directors at Fortress in London.

New York-headquartered Highbridge was initially planning to acquire an existing portfolio of asset-based loans from a European bank, one source close to the firm told PDI, though that plan didn’t pan out and Highbridge is now raising a fund from scratch. Highbridge declined to comment through an external spokesman.

Other large US alternative investment firms have started asset-based lending funds recently. Ares launched its Ares Commercial Finance fund earlier this year, having brought on a team from Keltic Financial last year. The firm also recently signed an agreement to acquire a $700 million ABL portfolio from First Capital Holdings. Apollo Global Management also set up a commercial finance direct lending platform through its acquisition of MidCap Financial recently. That platform has collected $1 billion for the initiative.

Highbridge, for its part, is also ramping up its business in Europe in other ways. The firm is expanding its joint venture with Related Companies, a real estate investment firm, to do more European mezzanine real estate deals, according to sources and LP documents. The JV was originally set up in 2013 to do US loans. Brian Sedrish, a managing director at Related Companies, who oversees the partnership, told sister publication Real Estate Capital in September that the program was interested in more European investing.

The Arizona State Retirement System, an LP in Related Companies, decided to increase its mandate with Related to $500 million from $300 million at its April board meeting, with $100 million designated toward European real estate investments in the Highbridge partnership. The Arizona system declined further comment and it could not be learned whether Highbridge and Related are starting a new pool of capital for European mezz deals or just drawing from the existing one, which was launched with $800 million in June 2013.

Highbridge is also in the process of splitting up from JPMorgan, as first reported by Institutional Investor in December. It’s unclear whether this will include the $18.6 billion HPS group, or all of Highbridge, which handles $26 billion and has the balance of its assets in hedge funds. JPMorgan bought a majority stake in the firm in 2004 and acquired the rest of the business in 2009.