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deals

Neuberger’s Dyal Is Near Deal to Buy HPS Stake

  • JPMorgan spin-out credit manager now manages $45 billion
  • Possible Dyal deal would follow Clearlake, Vector transactions

HPS Investment Partners, the credit manager spun out of JPMorgan Chase & Co., is in talks to sell a minority stake to Neuberger Berman Group’s Dyal Capital Partners, according to people familiar with the matter.

The negotiations are in an advanced stage, said the people, who asked to not be identified because the matter isn’t public. An agreement hasn’t been completed and the talks are continuing, they said.

Representatives for Dyal and HPS declined to comment.

HPS Chief Executive Officer Scott Kapnick, a veteran of Goldman Sachs Group Inc., formed the firm in 2007 as a unit of JPMorgan. HPS principals bought the firm, formerly known as Highbridge Principal Strategies, from JPMorgan in 2016. Since then, New York-based HPS has been expanding into new businesses and regions and managed about $45 billion as of March, according to its website.

About two-thirds of HPS assets fall into private credit strategies such as direct lending, mezzanine lending and asset-based financing to small and midsize businesses in Europe. About $16 billion of its assets involve public credit, according to its website.

Last month, Dyal teamed up with competitor Petershill, a Goldman Sachs unit, to buy a stake in Clearlake Capital Group. In April, it bought a stake in technology-focused private equity firm Vector Capital.

Dyal is raising its fourth fund, which is likely to exceed its $5 billion target, people familiar with the matter said last year.

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