Hyland Hill’s inaugural fund closes at its target, $250m

Three founders, formerly of Varde Partners, look to offer distressed solutions to Main Street.

Hyland Hill Investment Partners, a Minneapolis-based alternative credit investment firm, has closed on its inaugural fund, the Hyland Hill Fund I, with $250 million.

The fund will pursue a distressed strategy, acquiring performing, sub-performing and non-performing loans originated both by banks and other financial institutions.

In a statement, Hyland Hill said that it intends also to originate recovery loans secured by commercial real estate.

According to a person familiar with the firm, $250 million was the target.

Three executives who came from Varde Partners: Jason Spaeth, Jeff Thuringer, and Chris Giles, founded Hyland Hill in 2020. Spaeth is the CEO and chief investment officer of Hyland Hills. He was a managing partner at Varde and became head of its North American private credit business. Thuringer is partner and head of business loan investments at Hyland Hills. At Varde, he was senior managing director and was responsible for the CRE Management Fund ($750 million), which acquired performing and sub-performing mortgage loans and originated bridge loans. Finally, Giles is partner and head of household investments at Hyland Hills. At Varde, he was a senior managing director and managed the household investment business in North America, which specialized in consumer and residential mortgage loan transactions.

The three have more than half a century of collective experience in investments across asset classes, cycles and regions.

The statement quotes Spaeth estimating “that the US loan market is between $15-20 trillion in size and growing, and [we] believe we are well positioned to become a financing solution of choice in an attractive segment of the market often under-trafficked by other investors.”

Spaeth also said that stress in the economic system is hitting Main Street, so that “small businesses in particular will require capital as they increasingly face headwinds related to rising costs, supply chain issues, labor shortages, weakening consumer spending and reduced government support.”

A spokesman declined to comment on the institutional or geographical range of its investors, or whether there was a hard cap on the fund.