Who Has the Power
Citigroup Inc. and BlackRock Inc.’s private credit unit HPS Investment Partners have struck an agreement to collaborate on direct-lending deals across Europe, targeting as much as €15 billion ($17.5 billion) of financings over the next five years. The arrangement hands two Wall Street firms a bigger role in deciding who gets credit, on what terms, and at what cost, with the deal aimed at corporate and private equity clients in continental Europe and the UK.
The initiative, called Citi/HPS Private Capital Program, will focus on sub-investment grade debt, the kind of financing that often comes with heavier risk and tighter strings attached. According to a statement seen by Bloomberg News, the firms will work together on both senior and junior credit options, extending their reach across the layers of private lending that shape how businesses are financed outside the public eye.
The Credit Machine
The agreement is set to run across the next five years, with the firms targeting up to €15 billion in financings. That scale puts the collaboration squarely in the business of steering capital toward corporate and private equity clients, while the people most affected by the terms of that capital remain far from the room where the decisions are made.
The Wall Street firms will not stop at Europe. The statement said the collaboration will eventually expand to deals in the Middle East, widening the reach of the private credit apparatus beyond continental Europe and the UK. The expansion signals a larger push by major financial institutions to deepen their control over lending markets that operate away from public scrutiny.
The program’s focus on direct-lending deals matters because it places more power in private hands rather than in public institutions. Instead of transparent, broadly accountable financing, the arrangement centers on a private pipeline controlled by Citigroup Inc. and BlackRock Inc.’s HPS Investment Partners, with the firms coordinating both senior and junior credit options for the clients they choose to serve.
What They Call Financing
The target market is sub-investment grade debt, a category that tells you plenty about who is being courted and what kind of pressure is being packaged as opportunity. Corporate and private equity clients in continental Europe and the UK are the intended recipients, while the firms behind the deal position themselves as the gatekeepers of access.
The statement seen by Bloomberg News did not provide further details on the terms of the collaboration, but the outline alone shows the basic arrangement: large financial institutions pooling power to expand private lending across borders. In the language of the market, that is called a program. In practice, it is another mechanism for concentrating control over credit in the hands of the already powerful.
The collaboration between Citigroup Inc. and BlackRock Inc.’s HPS Investment Partners is framed as an agreement to finance growth. What it actually describes is a widening private credit channel, built by Wall Street firms, aimed at corporate and private equity clients, and set to stretch from Europe into the Middle East. The people at the bottom of that structure do not get to vote on it, and they do not get to set the terms.