HSBC pauses $4bn private credit investment amid market wobbles
HSBC is yet to deploy billions of dollars into its own private credit fund almost a year after announcing its plans, a report claims.
In early June 2025, HSBC said it would plough $4billion into its own asset manager’s range of private credit funds.
But, according to the Financial Times, none of the proposed funds have been transferred and there are no plans to change this.
The private credit allocation was initially billed as a way for HSBC to leverage its $3.2trillion balance sheet to muscle its way to the top table of alternative lending alongside private capital giants such as Apollo and Blackstone.
An individual familiar with HSBC’s failure to deliver on the commitment told the FT that executives had grown wary of the $4billion investment amid wobbles in the US private credit market.
Private credit funds have been hit by a wave of redemption requests driven by AI concerns and rising defaults, with some firms halting withdrawals entirely.
HSBC said it was ‘committed to our asset management’s offering in private credit funds’.
Halted: HSBC has paused a $4bn investment into its private credit fund
HSBC said that in the first quarter its private markets exposure was two per cent of its total $1trillion loan book, with ‘pure’ private credit at just $6billion.
Earlier this month, HSBC said it had set aside $400million to cover a ‘fraud-related’ loss at its UK investment bank linked to an Apollo-owned credit fund.
The lender’s chief financial officer, Pam Kaur, explained that the charge involved loans that HSBC had made to a private equity group, which was then exposed to private credit-related loans.
The charge surprised analysts as HSBC, unlike rivals Barclays and Santander, had not lent directly to Market Financial Solutions, the collapsed UK mortgage lender.
Administrators overseeing the insolvency of MFS have accused the collapsed lender’s owner, Paresh Raja, of misappropriating funds of at least £1.3billion.
HSBC’s indirect exposure via one of Apollo’s private-credit units makes it one of the banks hit hardest by the collapse of MFS.
HSBC shares fell 1.17 per cent or 15.80p to 1,334.20p on Friday, having risen more than 50 per cent in the past year.
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