Hayfin is pleased to announce that it has acted as Lead Arranger and Agent to global skincare company Crown Laboratories to support its acquisition of Revance Therapeutics (“Revance”; NSDQ; RVNC) with an $850 million first and second lien credit facility.
Hayfin has been a financing partner to Crown Laboratories since 2015, supporting the business both before and during Hildred Capital’s current ownership period. Since then, Hayfin has completed multiple acquisition financings and refinancings in support of Crown Laboratories as the business has scaled.
The acquisition of Revance enables Crown Laboratories to further bolster its best-in-class portfolio and aesthetic skincare products with DAXXIFY and the RHA collection of dermal fillers. As a biotechnology company, Revance will help complement Crown’s existing product portfolio through its innovative aesthetic and therapeutic offerings, enhancing patient outcomes and physician experiences.
Barrett Polan, Managing Director at Hayfin, said: “We are excited to continue our support of long-standing clients, Hildred Capital and Crown Laboratories, as they enter a new and exciting chapter in the Crown Laboratories story with this acquisition. The firm has been on an exceptional growth journey over the past years and has cemented its reputation as one of the foremost providers of aesthetic solutions. The combined portfolio of Crown Laboratories and Revance will enable them to capitalise on future commercial opportunities to grow and we look forward to supporting them on this journey in the future.”
Hayfin invests in the healthcare sector across its private credit strategies and through its specialist healthcare team, which focuses on making strategic investments throughout the capital structure from Hayfin’s various private credit strategies.
Transaction delivers on Hayfin’s objectives for greater team ownership, alignment, and incentivisation
Hayfin today announced the completion of a management buyout of the business supported by Arctos Partners (“Arctos”), a private investment firm, acquiring British Columbia Investment Management Corporation’s (“BCI”) majority stake.
The partnership supports Hayfin’s long-term objectives of greater team ownership, alignment, and incentivisation, as well as generating superior and consistent risk-adjusted returns for clients.
Arctos, via its Keystone strategy, which provides strategic partnership to leading financial sponsors, through bespoke growth capital and liquidity solutions, has underwritten 100 percent of the funding and will facilitate the Hayfin team becoming the majority owners of the common equity.
Tim Flynn, Co-Founder and Chief Executive Officer at Hayfin, said: “We are excited to partner with Arctos as we continue to enhance our offerings for investors, borrowers and sponsors. With a shared commitment to investment approach and values, our firms are well positioned to collaborate and seize the vast opportunity set we see for the benefit of our investors. This marks the beginning of an exciting new chapter for Hayfin, as we continue to expand and evolve in a rapidly changing market.”
Ian Charles, Co-Founder and Managing Partner at Arctos, said: “We are partnering with Hayfin, Europe’s premier private credit platform, at a pivotal moment in their growth trajectory. This transaction exemplifies Arctos Keystone’s mission to help great firms thrive and build the bridge from where they are to where they want to be. Together, our partnership positions Hayfin to accelerate its strategic growth ambitions, drive innovation across its platform, and bring more ownership and alignment to Hayfin’s leadership team. We couldn’t be more excited about the partnership.”
Founded in 2009, Hayfin specialises in providing critical debt, equity and hybrid capital solutions to meet a range of financing needs. The firm’s product offering spans direct lending, special opportunities, tactical solutions, high-yield/syndicated loans, healthcare opportunities, maritime yield and private equity solutions.
This year looks like it might be a seminal year for private credit. The asset class continues to demonstrate secular growth – with no signs (that we can see) of reversing. At the same time, it has to navigate significant economic and political uncertainty driven by a tricky mix of rates, inflation, geopolitical uncertainty and unsustainable levels of government borrowing, particularly in the United States and the UK.
In Europe, private credit has matured significantly. Since 2008 our asset class has become a critical component of non-investment grade financing to business across Europe – and is beginning to play a more important role in investment grade financing. It has also become an important component of portfolio construction for LPs around the world searching for downside protected, lower volatility returns.
The question is: how will private credit perform if substantial economic headwinds materialize as the world adjusts to what appears to a changing world order? Is it the ‘golden age’ of private credit because any headwinds on the horizon will enable the better managers to prove they have in fact underwritten attractive risk adjusted returns? Or are the sceptics right who argue that in an industry that has grown very quickly, those who arrived late may be left nursing losses?
Meanwhile, the inauguration of Donald Trump – two months on from an election which had been a key point of discussion with our LPs, sandwiched as it was between our two AGMs in London and New York – heralds potentially significant political change in the USA. The prospect of a second Trump term prompted a rally in equity markets and other asset classes but drove volatility elsewhere. While tariffs were a conspicuous omission from the new administration’s early barrage of executive orders, they remain firmly on the agenda and a reshaping of global trade patterns looks likely to remain a major theme in 2025. What might lay ahead no one can say with certainty. One thing does seem clear: Trump’s second term in office is likely to reshape the American political landscape and disrupt convention across the globe.
However, looking at the geopolitical landscape, we’re of the opinion that turbulence should be expected, and the resulting change in market technicals will shift capital allocation decisions, impacting a range of asset classes including private credit.
What does this mean for private credit 2025?
Despite the convulsions facing the global economy, we remain confident that both private credit as an asset class, and Hayfin as a manager in particular, are well-equipped to effectively weather these elevated levels of risk and uncertainty.
We’ve been here before during previous financial crises – most recently in COVID-19. Alternative investment managers like Hayfin are resolutely focused on mitigating risk. We’re students of the market. We bake uncertainty at its most fundamental level into our investment analysis, judiciously assessing the assets, sectors and markets in which we invest and the types of opportunities that will protect capital and yield results in the long-term.
A prerequisite to this is having the ability to originate deals and manage investments in an uncertain environment. The market has evolved significantly in the past 18 months, impacted by the resurgence of leveraged loan markets and a build-up of dry powder.
Private debt investors like Hayfin have had to respond to intensified competition and a changing opportunity set. The ability to originate a diverse range of deals gave us an important edge. The breadth of investment opportunities we can source and execute allowed us to continue deploying significant volumes of capital through our flagship Direct Lending strategy in 2024.
That is a function of how we have built our business. The same investment in our team, and in our capacity to manage a large volume of credit assets, was what enabled us to scale up our lending activity during the pandemic in 2020-21, while others were focused on managing their existing books. Sourcing deals from market niches that other lenders might overlook is also typical of our approach: when others zig, we zag. There are parallels with how we maintained discipline in terms of deployment at the outset of the supposed ‘golden age’ of 2022, when capital was readily flowing into the asset class.
And we believe our firm will go from strength to strength in 2025. Hayfin’s position as one of Europe’s leading alternative asset managers puts us in good stead to continue capitalising on opportunities for our investors.
That said, we cannot afford to rest on our laurels. It is important we continue to attract and retain our top talent to cement the strong market position that we have built over the last decade.
That is why we are so excited about our agreement with Arctos. It offers greater ownership and autonomy for our team, strategic and cultural alignment with our shareholders and ongoing capital support to fuel our continued growth. In short – more Hayfin.
Our next chapter for growth
Amidst the geopolitical uncertainties that will characterize 2025, we are committed to our disciplined risk management approach and will remain defined by our resilience and innovation. This will enable us to continue our focus on strategic execution, as well as delivering strong and consistent returns for investors regardless of the macroeconomic environment.
This new, next chapter of our growth holds great promise for Hayfin. While the core services and expertise that have shaped and defined the business will remain at Hayfin’s heart, we have put ourselves in an exciting position to look at new opportunities to expand and evolve our existing offering. The Hayfin playbook has never been better placed to help navigate the business through future market conditions and ensure we achieve consistent and superior risk-adjusted returns for our LPs.
Our new report considers how shifting US regulation offers both headwinds and tailwinds for healthcare investors.
The research explores the regulatory landscape and its influence on the competitive positioning of healthcare companies, discussing how:
1) Regulatory forces can act as strong headwinds, particularly for businesses involved in the provision of medical care services or insurance. In our view these sub-sectors are less attractive than other areas of healthcare
2) Some of these same regulatory forces can act as tailwinds for healthcare companies, especially for growth focused technology businesses where long-term success is more dependent on widespread adoption than on payer rates.
3) In these select cases long-term regulatory shifts can create asymmetry to the upside for companies’ return profile.
‘Examining Healthcare’ argues for a nuanced approach to effective capital allocation in the healthcare sector, including a dual focus on limiting disruption from risks that are difficult to quantify and finding opportunities where regulatory shifts can accelerate the adoption of proprietary science or technology.
Hayfin’s third office in the United States will support new capital raising and investment opportunities in the region
Hayfin today announces that it has opened an office in Chicago. Along with its New York and San Diego offices, Hayfin now has three offices in the United States, underscoring its commitment to the North American market.
This office will provide Hayfin with an additional point of access to the North American market that will enable it to identify new fundraising and investment opportunities. Managing Directors Steve Bringardner, who sits in the Partners Solutions team, and Andrew Merrill in the Healthcare investment team will be based in Chicago to lead the efforts in developing the office and growing the team.
Tim Flynn, Co-Founder and Chief Executive Officer at Hayfin, said, “Expanding our presence in North America is a top priority for us. Located in the financial center of the Midwest, our Chicago office will help our team to unlock new opportunities and build relationships across North America while further enhancing our (historically) best-in-class service to clients.”
“Hayfin has a long-standing track record of serving the Chicago area since inception dating back to 2009, and the local office will enhance the existing relationships with client and investment partners.”
The opening of the Chicago office increases Hayfin’s total number of locations to 14 alongside the firm’s headquarters in London and offices in Dubai, Frankfurt, Madrid, Milan, Munich, New York, Paris, Luxembourg, San Diego, Singapore, Stockholm and Tokyo.
Hayfin is pleased to announce that, through its Direct Lending strategy, it has provided fully underwritten debt financing to support the acquisition of V.Group by a consortium led by STAR Capital. Hayfin’s support for the acquisition extends its long-standing relationship with V.Group and its management team, having been a lender to the business since 2020.
V.Group is a global provider of mission-critical services to the maritime industry, such as technical ship and crew management, crew welfare services (e.g. catering, travel, and digital wallets & payment cards), leveraged procurement, technical services, specialist insurance broking, and modern shipping-specific digital solutions.
Headquartered in London, it has a global presence with 50 offices across 30 countries and employs c. 2,900 employees worldwide. In addition, the group has access to the world’s largest international network of over 44,000 seafarers to provide its clients with professional crews. It currently services approximately 3,500 vessels from pedigree shipowners and managers alike, with safety and compliance at the heart of V.Group’s operating model.
Andreas Povlsen, Head of Maritime at Hayfin, comments: “This latest investment builds on Hayfin’s track record in the shipping sector and is the direct result of strong collaboration between our specialist maritime team and the broader Private Credit platform focused on originating corporate lending opportunities. We are delighted to continue our journey with V.Group alongside its impressive management team and its new partners in the consortium led by STAR Capital.”
Disclosure
Past performance is not a guarantee of future performance. No investment, strategy or tested process can guarantee results. Please note, fees reduce returns to investors.
That it has been a comparatively tough few years for private equity is news to nobody. The rate-hiking cycle of 2022-23 has dampened M&A activity, impacted PE managers’ return expectations and prompted LPs to review their allocations to the asset class.
These developments have raised interesting questions for private credit. On the one hand, the same higher-interest-rate environment had prompted talk of a ‘golden age’ of private credit. On the other, the alternative lending market is widely perceived to be dependent, in large part, on strong PE-led M&A activity for its own deployment, as well as the return, of capital.
Last week, Hayfin attended IPEM, one of the leading European conferences on private markets, in Paris. The official theme of ‘Forging Confidence’ reflected the sense of cautious optimism towards tentative signs of an early-stage recovery in deal volumes. The event provided us and our peers with a chance to reflect on the unusual environment of the past few years and what this means for private credit going forward.
Newcomers find European private credit a tough nut to crack
There has been a notable change in the mood music between last summer’s flagship private market conferences and the conversations taking place last week with regard to competitive dynamics in private credit.
Last year, many investors and managers were suggesting that the market was about to be shaken up by a flurry of new managers. Both alternative investment firms and traditional asset managers were expected to pile into the asset class.
That sentiment has now been turned on its head. A number of the newer entrants to the asset class are reportedly either reevaluating their private credit strategies or scaling back their operations entirely. Subdued M&A activity and, by extension, direct lending volumes have been felt more sensitively by alternative credit providers who do not have an established presence and are looking to break into the market.
The concentration of activity among a relatively small number of participants has been a longstanding feature of the European private credit market. The top 25 private credit funds in Europe have accounted for up to three-quarters of the total capital raised since 2007. By contrast, in the US, the top 25 funds account for approximately half of total fundraising, there is a long tail of smaller funds that hold a large pool of capital and can better compete with their larger peers on deal sourcing.
In the European market, in other words, capital and investment opportunities accrue to the top 25 largest private credit funds, with the Direct Lending market in which we operate having 10 or fewer direct competitors.
Advantages of incumbency laid bare
The lingering uncertainty about the global macroeconomic environment, as well as the mismatch in valuation expectations between the buy-side and sell-side, all of which served to suppress transaction activity over the last couple of years, has begun to abate. We are seeing greater convergence on valuations and growing confidence that, if sponsors bring the right assets to the market, they are less likely to falter during the sale process.
However, it remains difficult to assess when M&A activity will reach the top of its cycle again. It’s quite likely that a higher-interest-rate environment will remain a drag on a fully fledged rebound.
Private credit firms that are less heavily reliant on an opportunity set defined by the cyclical nature of M&A will therefore continue to enjoy an advantage in deploying capital over the years ahead.
In truth, large parts of the market do depend on this cycle. Once again, the established players with incumbency advantage are best placed to access narrower PE-led processes when M&A activity is subdued, and sponsors revert their focus on bolt-ons for existing portfolio companies. For example, in recent years, our existing exposure to more than 80 borrowers across our Direct Lending portfolios has allowed us to continue sourcing significant volumes of deal flow in high-quality companies we know well.
The ability to originate these preferred deals is particularly advantageous in an investment environment characterised by a growing bifurcation in credit quality. Lenders without a large and sophisticated deal origination network will risk being adversely selected and ending up with concentrated exposure to second-tier credits, such as businesses that are more exposed to cyclicality, with tighter margins or more likely to struggle in a recessionary environment due to being smaller. Those who have that capability and the incumbency advantage can access deals with lower leverage and better documentation protections than has been the norm in recent years, at pricing levels that make for highly attractive risk-adjusted returns.
Return of the broadly syndicated loan market?
Finally, the post-summer gathering at IPEM provided an opportunity to reflect on another widely predicted trend that has not materialised to the extent that many expected.
The first half of 2024 witnessed the widely heralded return of the broadly syndicated loan market (BSL), offering many upper-mid-market borrowers another avenue for financing, often at tighter spreads and more flexible documentation. This drove speculation that private credit managers would need to cut margins to compete.
Our view had always been that a portion of deals which were financed by private credit in 2022 and early 2023, when leveraged finance markets were effectively closed, would be refinanced back into the syndicated markets. However, we predicted that there would remain a still-large opportunity set of sponsors and businesses for whom the tightest possible pricing isn’t their sole concern. That could be mid-market businesses less likely to find a solution on syndicated markets, or large-cap sponsors investing in a challenging sector or pursuing a buy-and-build strategy which requires incremental capital.
It has certainly become more important for private credit managers to demonstrate their ability to access attractive deal flow involving companies in sectors, size brackets or situations where the certainty, efficiency, flexibility and resilience offered by a direct lender outweigh the purely economic or documentary incentives to tap the BSL market. But we believe that the comparative deal volumes in the BSL and private credit markets are bearing out our assessment that there is a large and fast-growing white space not covered by syndicated markets, available at a risk-adjusted-return profile that meets LPs’ expectations.
Hayfin is pleased to announce that it has provided the debt financing to support TowerBrook Capital Partners’ (“TowerBrook”) acquisition of a majority stake in IDAK Food Group (“IDAK”) from Invision and Nord Holding.
IDAK is a strongly networked group of specialised companies and manufacturers operating across the premium frozen food sector. In recent years, IDAK has delivered strong growth, both organically and inorganically through strategic acquisitions in Switzerland and further abroad.
The change of ownership will aim to grow IDAK’s capital base and provide the company with a platform to pursue further M&A opportunities across Europe. The well-established IDAK management team, led by CEO Christof Lehmann, will remain in place.
Robert da Costa, Director, Private Credit, commented: “Hayfin has a longstanding relationship with TowerBrook and we are pleased to provide the financing for this transaction. We have been impressed by IDAK’s management team who have delivered exceptional historical performance. We look forward to working with the IDAK team and supporting their continued growth trajectory alongside TowerBrook.”
Olaf Hartmann, Head of DACH and Portfolio Manager for Private Credit, added: “IDAK has become one of the most exciting European food businesses in recent years, and we are delighted to be partnering with them to support their next stage of growth. The transaction also demonstrates the benefits of our local footprint and the strength of our DACH franchise, an area where we see significant opportunities going forward.”
Disclosure
Past performance is not a guarantee of future performance. No investment, strategy or tested process can guarantee results. Please note, fees reduce returns to investors.
- Transaction follows successful long-term partnership with BCI and delivers on Hayfin’s
objectives for greater team ownership, alignment, and incentivization - No changes expected to Hayfin’s strategy, investment process, leadership, or day-to-day operations
- BCI will remain a strategic limited partner in certain Hayfin funds post-closing
Hayfin today announced it has entered into an agreement with Arctos Partners (“Arctos”), a private investment firm, to support a management buyout of the business, acquiring British Columbia Investment Management Corporation’s (“BCI”) majority stake. Financial terms were not disclosed.
This new partnership delivers Hayfin’s long-term objectives of greater team ownership, alignment, and incentivization, as well as generating superior and consistent risk-adjusted returns for clients. Arctos, via its Keystone strategy, which provides strategic partnership to leading financial sponsors, through bespoke growth capital and liquidity solutions, has underwritten 100 percent of the funding and will facilitate the Hayfin team becoming the majority owners of the common equity. BCI will remain a strategic limited partner in certain Hayfin funds.
Founded in 2009, Hayfin specializes in providing European and North American credit and private equity investment solutions to a global investor base. BCI acquired a majority stake in the firm in January 2017, and since that time Hayfin has experienced strong sustained growth and momentum, quadrupling its AUM, adding senior talent, and diversifying and expanding its strategies. Hayfin’s product offering now spans direct lending, special opportunities, tactical solutions, high-yield/syndicated loans, healthcare opportunities, maritime yield and private equity solutions.
Tim Flynn, Co-Founder and Chief Executive Officer at Hayfin, said: “This is an exciting new chapter that will support Hayfin’s ongoing growth while preserving our core identity and operational autonomy. Arctos has a best-in-class, like-minded team that recognizes the enormous opportunity available to investors in the credit markets today, and their experience only enhances our ability to serve our investors, borrowers and sponsors. Our long-standing team is grateful to BCI for the last seven years of successful collaboration, and we look forward to a continued relationship with them as an investor in our products.”
Ian Charles, Co-Founder and Managing Partner at Arctos, said: “Hayfin has an excellent leadership team supported by a robust bench of talent, proven track record and disciplined investment style. Their strategic growth ambitions make them an ideal partner for Arctos Keystone and provides our investors access to Europe’s leading private credit platform as that market continues to see rapid growth. We look forward to supporting Hayfin’s long-tenured investment team in delivering our shared objective of generating attractive risk-adjusted returns for our respective investors.”
Jim Pittman, Executive Vice President & Global Head of Private Equity at BCI, said: “We are delighted to have reached this agreement with Hayfin and Arctos, delivering an excellent outcome for BCI’s pension plan and insurance clients. We’re extremely proud of the partnership we forged with the Hayfin team over the past seven years, which has delivered significant growth in a critical period for the private credit market. We remain confident in Hayfin’s investment strategies and are pleased to remain as a limited partner in certain funds.”
Hayfin is pleased to announce that it is the lead lender providing the debt financing to support the acquisition of international events company, Easyfairs, by Cobepa, Inflexion and the existing management team.
Easyfairs is one of the world’s top ten events companies, welcoming more than one million visitors annually and 23,000 exhibitors to its events. Easyfairs organises 110 event titles in 12 countries across 12 industry verticals. It also manages eight event venues in Belgium, the Netherlands and Sweden.
The transaction will enable Easyfairs to drive faster organic growth through new event launches and geo-cloning of existing events, extend its geographic and sector footprint, enhance its position as a sector frontrunner in big data and artificial intelligence technologies, and unlock further strategic M&A opportunities.
Sebastiaan Tito, Principal, Direct Lending at Hayfin, commented: “Our investment into the acquisition of Easyfairs demonstrates Hayfin’s extensive experience in the events sector as well as our ability to successfully position ourselves in attractive market segments and execute financing agreements of significant scale to provide speed and certainty to our partners. We are excited to partner with the shareholders in supporting Easyfairs, a business with great potential, supported by a strong pipeline of organic and inorganic growth opportunities.”
Disclosure
Past performance is not a guarantee of future performance. No investment, strategy or tested process can guarantee results. Please note, fees reduce returns to investors.