Canadian pension fund to buy British lender Hayfin

Canadian pension fund British Columbia Investment Management Corporation (BCIMC) is to buy a majority stake in UK-based lender Hayfin Capital Management for around £215m, according to a report by Sky News.

Hayfin Capital Management, founded in 2009 by former Goldman Sachs partners, serves clients such as The Racing Post and Quorn. It has €8.2bn assets under management and has built a successful business by lending money to medium-sized European companies.

The deal will reflect a growing appetite to invest in alternative lenders, many of which have started over the last decade to take advantage of the gap left by traditional banks.

Regulatory restrictions invoked after the 2008 financial crisis has made it difficult for conventional banks to lend to companies on economically attractive terms leading to a rise in competitors like Hayfin and Ares Capital Management.

According to sources at BCIMC, which manages more than around $120bn of assets, will buy out Hayfin’s existing institutional shareholders: Towerbrook Capital Partners, Australia's sovereign wealth fund and two other Canadian pension funds.

Hayfin’s management and employees will also retain their shareholdings following the deal.

The British Columbia-based fund is expected commit significant funds for its expansion while the London headquartered lender will retain day-to-day autonomy over its operations and investments.

The transaction is believed to be beneficial to Hayfin’s management because it will simplify the company’s ownership structure and provide a platform for future growth.

In 2015 Hayfin sold its portfolio of owned assets to the Australia’s state-backed investor Future Fund .