Citigroup has entered into a strategic partnership with HPS Investment Partners, an affiliate of BlackRock, to create a 15 billion euro ($17.48 billion) private credit program aimed at scaling direct lending across the EMEA region, the two firms announced on Monday.
Under the agreement, Citi will apply its sourcing capabilities to identify investment opportunities for the vehicle. The program will concentrate on borrowers whose businesses operate in Continental Europe and the United Kingdom, with plans to extend coverage to the Middle East over time.
John McAuley, Citi’s co-head of debt capital markets, said the alliance with HPS is intended to address growing demand from Citi’s corporate and sponsor clients for tailored private credit solutions. The initiative is structured to finance a wide array of sub-investment grade debt instruments across EMEA during an initial five-year term.
The partnership highlights the ongoing trend of collaboration between banks and asset managers to build scale in the private credit market, a sector that has attracted heightened attention in recent months amid a series of negative headlines. Despite those headlines, institutional investors continue to show renewed interest in direct lending, the segment of private credit that has faced the most scrutiny.
The announcement follows another sizable private credit arrangement involving Citi. Roughly two years after that prior deal, Citi in 2024 partnered with Apollo Global on a $25 billion private credit and direct lending program.
Financial details in the announcement included the euro-dollar conversion reference of $1 = 0.8583 euros. The new HPS-linked program is positioned as a multi-year effort to deploy capital across a broad spectrum of non-investment grade debt opportunities within the EMEA geography.
What this means
- Bank and asset manager collaboration is being used to scale private credit offerings to corporate and sponsor clients across EMEA.
- The program targets borrowers domiciled in Continental Europe and the UK, with planned expansion to the Middle East.
- The vehicle is designed to operate over an initial five-year span and to finance sub-investment grade debt instruments.