HSBC Asset Management launches NAV Financing Partnership Fund
HSBC Asset Management has launched the first vintage of its NAV financing strategy, attracting a significant anchor commitment from HSBC Group.
The HSBC NAV Financing Partnership Fund will provide senior loans secured by private equity portfolios, supporting both fund managers and investors’ portfolios. The majority of the underlying loans are expected to be investment grade rated.
As part of the partnership with HSBC, the strategy will be managed by HSBC Asset Management’s capital solutions team, providing origination, structuring and investment expertise, off the back of HSBC’s global origination and fund finance underwriting capabilities.
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“For our institutional and wealth clients, this strategy provides access to an investment grade private debt opportunity that diversifies traditional direct lending exposures, with shorter duration, potentially attractive risk-adjusted returns and an independent, external investment grade rating,” said Borja Azpilicueta, head of capital solutions at HSBC Asset Management. “By partnering with HSBC Bank, our strategy aims to provide investors with differentiated access to a scalable investment opportunity leveraging HSBC’s sponsor network.
He added: “NAV finance is becoming a core part of the global private equity fund ecosystem as, in our view, fund managers and investors alike aim to continue building value in the context of longer asset hold periods. NAV finance provides investors the flexibility needed to drive portfolio growth and value creation.”
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The HSBC NAV Financing Partnership Fund is the second strategy managed by HSBC Asset Management’s capital solutions team following the introduction of the first vintage of HSBC Asset Management’s revolving credit facilities partnership strategy in November 2023.
The capital solutions team was established in 2022 to offer clients access to HSBC’s proprietary private asset deal flow.
HSBC Asset Management’s alternatives business has combined assets under management and advice of $71.1bn (£53.2bn) as of 30 June 2024, with alternative credit constituting $6.6bn of this.
Read more: NAV finance: Behind the headlines
