Hayfin closes fourth direct lending fund at over €6bn

The fund is the firm’s largest to date and hopes to take advantage of reduced appetite among banks to support leveraged financings.

UK-based credit manager Hayfin Capital Management has closed its latest direct lending fund above its €6 billion target.

Hayfin Direct Lending Fund IV is joined by several related investment vehicles which mean it should  reach its €7 billion hard cap by the end of the year.

The fund originates performing, senior-secured loans to European mid-market and upper-mid-market companies with an emphasis on downside protection. It sources deals through its 12 offices across its target geographies but will also acquire senior loans on the secondary market.

Hayfin said banks are reducing their risk appetites, resulting in low new issuance levels in the leverage finance market since early 2022, which it hopes to take advantage of due to growing demand for private credit solutions.

The fund attracted a broad range of investors including new and existing LPs. It raised capital from public and private pension funds, insurance companies, sovereign wealth funds, fund of funds, endowments, consultants and family offices. Its previous vintage closed on €5 billion in 2020.

Tim Flynn, CEO and co-founder of Hayfin, said: “Hayfin was founded in 2009, in the aftermath of the global financial crisis, which saw traditional banks’ appetite for corporate lending recede sharply. The recent market dislocation and the sluggish recovery of the leveraged finance market presents another attractive environment for Hayfin to deploy capital into both mid-market and upper-mid-market financings.”