HPS holds final close on $10bn fund

Senior debt vehicle includes $7.3bn of equity commitments, has committed 57% of its capital to 54 investments.

HPS Investment Partners has held a final close for its second Core Senior Lending Fund (CSL II) with $10 billion in investable capital. Of that, $7.3 billion represents equity commitments.

CSL II launched in June 2020, according to Private Debt Investor data. It held its first close in December 2021, according to a source familiar with the matter.

The source declined to put a number on the target amount for this fund but did say that the actual closing exceeded it. The latest fund was more than twice the size of of its precursor fund, CSL I, which closed at $4.2 billion in 2018.

This fund “significantly enhances [HPS’s] ability to deliver compelling investment solutions for sophisticated institutional investors and addresses the capital needs of a wide range of borrowers across sectors and geographies”, according to Michael Patterson, a governing partner of HPS and portfolio manager for its direct lending funds.

Like the precursor fund, CSL II will pursue a senior corporate debt strategy. It will have a very broad geographical range, including the US, Western Europe, Australia and New Zealand.

According to the statement HPS put out at closing, the fund has committed approximately 57 percent of its capital to 54 investments this far. It invests in sponsored, non-sponsored and public borrowers.

This has been an eventful spring for HPS. In April, the New Jersey Division of Investment disclosed that it had made $550 million in commitments to two vehicles that HPS manages, and had committed $200 million more towards co-investment vehicle. Also in late April, the School Employees’ Retirement System of Ohio allocated $75 million to the HPS Specialty Loan Fund VI.

HPS, a New York-based firm, was founded in 2007. JPMorgan spun it off in 2016. At present, HPS, originally Highbridge Principal Strategies, has about $101 billion in assets under management: $22 billion in public credit and $79 billion in private credit. Institutional investors constitute 85 percent of its overall investment base.