Hermes Investment Management has launched the Hermes European Direct Lending fund, which builds on the business generated through the previous launch of the UK Direct Lending fund in 2016.
The new fund will be managed by Patrick Marshall, head of Private Debt & CLOs. The portfolio will invest in senior secured loans targeting mid-market businesses across the European region, with a focus on Scandinavia, Germany, Benelux and Ireland. The transactions will be originated through co-lending partnerships with Danske Bank, DZ Bank and KBC Bank, alongside an existing partnership with RBS for the UK market. Origination of deals will be supported by Hermes contacts with private equity firms, banks and borrowing businesses.
The asset class provides protection against downside risk and inflation hedging, as well as diversified and stable returns, Hermes noted. The loans made will target those businesses deemed “quality” and with growth plans, with investments made on the basis of preserving capital and capturing yield, Marshall added.