Citigroup and BlackRock’s private‑credit arm HPS Investment Partners have signed a five‑year pact to originate direct‑lending deals across Europe. The Citi/HPS Private Capital Program targets up to €15 billion ($17.5 billion) in financing for sub‑investment‑grade borrowers in the UK and continental Europe. Both senior and junior credit structures will be pursued, with an eye toward future Middle‑East transactions, and the partnership also envisions leveraging Citi’s client network to source deals across emerging industries and new markets.

John McAuley, co‑head of global debt capital markets at Citi, said the bank will supply origination and structuring while HPS provides capital and credit decisions. The alliance builds on a similar U.S. programme launched two years ago and mirrors a broader shift as banks seek fee revenue without expanding balance‑sheet exposure amid tighter capital rules, while diversifying balance sheets for resilience.

The deal lets Citi tap HPS’s European lending scale while giving HPS Investment Partners a pipeline to meet the record inflows that private‑credit funds are racing to deploy. HPS, bought by BlackRock in mid‑2025 for roughly $12 billion, joins Citi’s existing $25 billion Apollo alliance, underscoring banks’ strategy of partnering rather than competing for sponsor‑backed loans in the near term.