HPS Investment Partners

HPS operates as a multi-strategy credit manager, with the majority of its capital deployed through direct lending — originating senior secured loans to sponsor-backed middle-market and upper-middle-market companies. The firm also runs sizable mezzanine and subordinated debt programs, targeting junior capital in leveraged buyouts and recapitalizations, and a real estate credit arm that finances commercial and residential projects. These three verticals operate under one investment committee, enabling internal cross-pollination that the firm argues gives its deal teams a sourcing and structuring edge over single-strategy lenders.

HPS typically holds the majority of its originated loans on its own balance sheet rather than syndicating exposure, which lets it negotiate terms and covenants directly with sponsors and portfolio companies without needing to clear a distribution desk. That retention model also positions the firm as a single-creditor counterparty in many deals, reducing execution risk for borrowers. The balance-sheet scale — estimated above $100 billion in total assets — gives HPS a lending capacity that rivals the institutional loan books of top-tier money-center banks.

Investment decisions are driven by the senior partners who spun the platform out of Highbridge in 2007: CEO Scott Kapnick, Managing Partner Scot French, and the firm's partnership committee. Each of the three core verticals — direct lending, mezzanine, and real estate — operates with dedicated deal teams but funnels into a centralized underwriting and allocation process. Kapnick retains authority on fund-level mandate shifts, with the partnership structure governing carry and capital allocation across the firm's pooled vehicles and separately managed accounts.

HPS is almost entirely a direct deal shop — it originates and structures individual credits, real estate loans, and structured equity positions rather than operating a fund-of-funds or LP commitment program. The capital flows through closed-end pooled vehicles and separately managed accounts for institutional limited partners, each of which is then directly deployed into assets the firm's investment teams source and underwrite internally.

HPS filed confidentially with the Securities and Exchange Commission for an initial public offering in December 2024 (per Financial Times, December 2024). A successful listing would convert the firm from its current private partnership structure into a publicly traded alternative asset manager, following a path blazed by peers including Ares Management, Blue Owl, and Owl Rock. The filing has not yet been made public, and pricing and timing remain undisclosed.

HPS has not published explicit sector exclusions, though its direct lending practice concentrates on sponsor-backed industrials, business services, technology, and healthcare — asset classes with recurring cash flows and hard asset coverage favorable to senior secured structures. The firm broadly avoids venture-stage lending and early-stage life sciences, where cash flow collateral is insufficient for its underwriting model. Core direct lending credit committees have historically steered away from commodity-price-dependent sectors without robust hedging frameworks.

HPS Investment Partners was created in 2007 when Scott Kapnick and his team carved out the credit and fixed-income platform of Highbridge Capital Management, the multi-strategy hedge fund J.P. Morgan Asset Management acquired in 2004. Kapnick, who left Goldman Sachs for Highbridge prior to the carve-out, structured the spinout to create an independent credit-focused firm. Though J.P. Morgan initially retained a minority stake, the bank exited its position over subsequent years, and HPS now operates as an independent partnership with no remaining equity ties to either Highbridge or J.P. Morgan.