Hayfin today announces a record period of deployment through its Direct Lending strategy, having invested €3.7bn in 2020. Hayfin reached a final close on the commingled Hayfin Direct Lending Fund III and its related separately managed accounts in 2020, raising in excess of €5bn to deploy into performing loans to European middle-market companies. During this record period of activity, the firm bolstered its investment team, business development function and back-office operations with 35 new hires.
Within its Direct Lending strategy, Hayfin focuses on the provision of senior-secured loans that exhibit strong returns relative to their risk profile and an emphasis on downside protection. Prior to the outbreak of Covid-19, Hayfin successfully self-originated a high volume of primary investment opportunities through its local sourcing teams across six offices globally and its sector-specialist teams, as well as acquiring attractively priced loans in the secondary market. Despite primary issuance in direct lending markets falling during the pandemic, Hayfin’s deep and extensive origination capabilities, expanded team and large portfolio of existing borrowers allowed the firm to accelerate its rate of deployment in 2020. Hayfin was able to maintain its high underwriting standards while increasing its pace of investment amid reduced competition for deals, as banks’ underwriting appetite declined and many other funds were required to focus primarily on portfolio management.
Hayfin’s latest fundraise was oversubscribed and attracted capital commitments from a broad range of institutional investors globally, including both new and existing LPs, comprising public and private pension funds, sovereign wealth funds, insurance companies, endowments, consultants, financial institutions and family offices. This represented Hayfin’s largest capital-raise to date across its strategies, exceeding the more than €3.5 billion raised for the previous vintage of the firm’s Direct Lending strategy in February 2017.
Tim Flynn, Chief Executive Officer and Co-Founder of Hayfin, commented: “From the outset, we built Hayfin not only to be disciplined and originate a diverse range of investment opportunities in good times, but also to continue providing capital in a downturn. While the macroeconomic environment is undoubtedly vastly different now than in years past, we will continue to invest in strong European middle-market companies, as their financing needs grow and traditional sources of capital remain constrained.
“We are delighted with the robust deployment of our Direct Lending strategy thus far. Hayfin has one of the longest track records in European private credit, with a proven ability to invest throughout the cycle, protect against downside risk and generate strong risk-adjusted returns. We believe we are well positioned in the current market environment to continue doing so for our investors.”
Since it was founded in 2009, Hayfin has invested over €24 billion of capital across more than 375 portfolio companies.