British Columbia Investment Management Corporation (“BCI”), one of Canada’s largest institutional investors, today announced it has entered into a definitive agreement with Arctos Partners (“Arctos”), a private investment firm, to sell its majority stake in Hayfin Capital Management (“Hayfin” or the “Company”), a leading European-focused alternative asset management firm. Following completion of the transaction, BCI will remain a significant and strategic limited partner in certain key Hayfin fund strategies.
BCI acquired a majority stake of Hayfin in 2017, after identifying a compelling opportunity in the European market for private credit, driven by regulatory and structural demand trends. During its ownership, BCI made significant strategic investments to support the continued growth of Hayfin’s strategies and worked with management to grow the investment teams and platform capabilities to ensure stable asset management and superior risk adjusted performance. Hayfin experienced strong sustained growth and momentum as a result, increasing assets under management from €8 billion at the time of investment to over €31 billion today. Hayfin’s product offering now spans direct lending, special situations, tactical solutions, high-yield/syndicated loans, healthcare opportunities, maritime yield and private equity solutions. Through the course of its ownership, BCI provided strategic input, industry expertise, capital support, and talent resources to help guide Hayfin towards achieving significant growth and scale over a seven-year period. Overall, BCI’s investment is expected to generate a significant return on invested capital and a successful outcome for its pension plan and insurance fund clients.
Jim Pittman, Executive Vice President & Global Head of Private Equity at BCI, said “BCI’s successful private equity partnership with Hayfin’s management reflects our flexible, creative, and collaborative approach to investing. Given our long-term investment horizon, we were able to spot an emerging trend early on in the cycle – in this case the growth of the European private credit market – and help scale Hayfin into the market leader it is today.”
Pittman added, “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, its management team, strategic vision and investment strategies and are pleased to remain as a significant limited partner in certain key funds.”
BCI’s private equity program has a long-established presence in Europe through notable direct investments in multiple industry-leading companies such as Hayfin, BMS Group, ZEDRA, Refresco, Compre Group and Waterlogic, where it can bring its capital and operational expertise to bear. With a growing portfolio of companies and fund partners in Europe, BCI intends to continue accelerating the footprint of its private equity program in this critical region.
The transaction is subject to customary regulatory approvals and is anticipated to close in Q4 2024.
Goldman Sachs International and Moelis & Company LLC served as financial advisors to Hayfin and BCI. Weil Gotshal & Manges LLP acted as legal counsel to BCI, Macfarlanes LLP and Cleary Gottlieb Steen & Hamilton LLP acted as legal counsel to Hayfin, Kirkland & Ellis LLP acted as legal counsel to Hayfin management and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel to Hayfin’s independent directors.
