Citigroup Inc. and BlackRock's HPS Investment Partners have launched a €15 billion [1] private credit program to expand lending across the EMEA region.
This partnership allows Citi to increase its capacity to finance private-equity dealmaking. It addresses a growing demand for private-credit financing in Europe and the Middle East, where corporate and sponsor-owned borrowers are seeking alternatives to traditional bank loans.
The program focuses on direct lending and private financing within the Europe, Middle East, and Africa region [1], [3]. By partnering with HPS Investment Partners, Citi gains additional firepower to support large-scale transactions and complex financing needs for its clients [1], [2].
The initiative was announced on May 18, 2024 [3]. The total value of the program is estimated at approximately $17.48 billion [3]. This capital injection is designed to provide more flexible funding options for corporate borrowers who may find standard credit markets too restrictive or slow.
Private credit has seen a surge in popularity as non-bank lenders offer more tailored terms than traditional financial institutions. Through this collaboration, Citi leverages the specialized investment expertise of HPS Investment Partners while utilizing its own global distribution network and client relationships.
The program targets a diverse range of borrowers, specifically focusing on those owned by sponsors, such as private equity firms, and large corporate entities [1], [4]. This strategic move positions Citi to compete more effectively against other global banks and private credit funds that have aggressively expanded their footprints in the EMEA markets.
“A €15 billion private credit program to expand direct lending across the EMEA region.”
This partnership signals a strategic shift for Citi toward the burgeoning private credit market, which allows the bank to facilitate massive deals without keeping as much risk on its own balance sheet. By aligning with HPS Investment Partners, Citi is reacting to the trend of 'shadow banking' where private funds replace traditional syndicated loans, ensuring the bank remains a central player in corporate finance across Europe and the Middle East.
