Citi and HPS Investment Partners have launched a €15 billion Private Capital Programme targeting direct lending to corporate and sponsor-owned borrowers across Europe, the Middle East, and Africa. The five-year vehicle represents one of the largest bank-asset manager partnerships in European private credit, combining Citi's extensive origination capabilities with HPS's investment expertise.

The programme will leverage Citi's Investment, Corporate, and Commercial Bank networks to source opportunities, focusing primarily on Continental Europe and the UK with plans to expand into the Middle East. This partnership formalizes a growing trend of traditional banks partnering with asset managers to access private credit markets, which have expanded rapidly as investors seek yield in a low-interest-rate environment.

Direct lending has become increasingly attractive as companies seek alternatives to traditional bank financing, particularly mid-market firms that may not qualify for public bond markets. The €15 billion commitment signals strong institutional confidence in the EMEA private credit space and could pressure competitors to establish similar large-scale arrangements.

This move positions both firms to capture a larger share of the expanding private credit market, which has grown substantially as banks retreat from certain lending segments post-financial crisis. The partnership structure allows Citi to maintain client relationships while HPS manages the investment risk.