Europe's largest lender, HSBC, has furthered its shift into private credit funds with a $4bn investment in its asset management division.
The bank is utilising its asset management business to lead a transition into the thriving $1.6tn private credit market, as reported by .
HSBC announced that it will invest the new capital into its alternative credit funds, aiming to attract external investor money and scale up a $50bn credit platform within the next five years.
This move comes as part of a broader push from the banking industry to dominate the private credit market, traditionally controlled by asset managers such as Blackstone and Ares.
Nicolas Moreau, Chief Executive of HSBC Asset Management, told Reuters: "It's an arms race."
He stressed that the bank's fresh funding would aid the division in attracting new capital.
Rapidly expanding market
HSBC's private credit strategy aims to focus on direct lending opportunities across the º£½ÇÊÓƵ and Asia.
In November 2024, the firm launched a new venture debt strategy, seeking to diversify its offerings in the rapidly expanding market.
This strategy aimed to raise $500m from investors, with targeted annual returns of 15 to 18 per cent.
The FTSE 100 titan hopes to expand across a market which, according to Morgan Stanley, could be worth $2.8tn by 2028.
This shift in strategy continues Chief Executive Georges Elhedery's overhaul of the lender.
Elhedery envisioned a restructured bank under a simpler, more dynamic, and agile model, unveiled in October 2024.
The bank's chief executive vowed to cut £1.2 billion in costs by the end of 2026.
A key aspect of the plan involved dividing the business into "eastern markets" including Asia-Pacific and the Middle East, and "western", encompassing the Americas and Europe.
However, the reorganisation has sparked concerns that the lender is paving the way for a gradual retreat from European markets after making significant job cuts across the region.
