Key Takeaways
- • Citigroup and BlackRock's HPS Investment Partners launched a €15 billion ($17.48 billion) private credit program targeting direct lending across EMEA, with initial focus on Continental Europe, the UK, and eventual expansion to the Middle East.
- • Citi will leverage its origination and client relationship capabilities to source investment opportunities for sub-investment grade debt instruments, addressing growing demand from corporate and sponsor clients for tailored private credit solutions.
- • The partnership demonstrates accelerating bank-investment firm collaboration in the multi-trillion-dollar private credit market, following Citi's 2024 $25 billion direct lending program with Apollo Global.
- • The program operates on an initial five-year term and underscores institutional investor appetite for direct lending despite recent negative headlines and regulatory scrutiny surrounding the private credit asset class.
- • BlackRock completed its $12 billion acquisition of HPS in July 2025, positioning the firm as a major player in global private markets and enabling strategic partnerships like this Citi arrangement.
Summary
Citigroup and BlackRock's HPS Investment Partners announced a partnership on May 18, 2026, to establish a €15 billion ($17.48 billion) private credit program targeting the EMEA region. The collaboration aims to expand direct lending capabilities across Continental Europe, the United Kingdom, and eventually the Middle East, with the program structured on an initial five-year term.
Under the arrangement, Citi will serve as the primary originator of investment opportunities, leveraging its institutional relationships with corporate and sponsor clients to source borrowers and tailored credit solutions. John McAuley, Citi's co-head of debt capital markets, characterized the partnership as a direct response to accelerating client demand for customized private credit offerings. The program will focus on sub-investment grade debt instruments across a diversified range of industries within the EMEA region.
The partnership reflects a broader strategic shift among major financial institutions to expand private credit exposure through collaborative arrangements. Notably, Citi previously partnered with Apollo Global in 2024 on a $25 billion direct lending program, demonstrating the bank's sustained commitment to the alternative credit space. These partnerships underscore the structural growth in private credit as institutional capital seeks yield in a lower-for-longer rate environment.
Despite intensified regulatory and media scrutiny around the private credit asset class in recent months, institutional investors continue to demonstrate meaningful appetite for direct lending opportunities. The Citi-HPS collaboration signals confidence in the underlying fundamentals of private credit markets and the ability of leading managers to structure compelling risk-adjusted returns. BlackRock's completed acquisition of HPS in July 2025 for $12 billion positioned the firm to execute precisely these kinds of strategic partnerships, combining HPS's specialized credit expertise with Citi's origination platform and client access.
The announcement underscores the consolidation and deepening partnerships within private credit markets, where scale, origination capability, and institutional relationships have become critical competitive advantages.
Under the arrangement, Citi will serve as the primary originator of investment opportunities, leveraging its institutional relationships with corporate and sponsor clients to source borrowers and tailored credit solutions. John McAuley, Citi's co-head of debt capital markets, characterized the partnership as a direct response to accelerating client demand for customized private credit offerings. The program will focus on sub-investment grade debt instruments across a diversified range of industries within the EMEA region.
The partnership reflects a broader strategic shift among major financial institutions to expand private credit exposure through collaborative arrangements. Notably, Citi previously partnered with Apollo Global in 2024 on a $25 billion direct lending program, demonstrating the bank's sustained commitment to the alternative credit space. These partnerships underscore the structural growth in private credit as institutional capital seeks yield in a lower-for-longer rate environment.
Despite intensified regulatory and media scrutiny around the private credit asset class in recent months, institutional investors continue to demonstrate meaningful appetite for direct lending opportunities. The Citi-HPS collaboration signals confidence in the underlying fundamentals of private credit markets and the ability of leading managers to structure compelling risk-adjusted returns. BlackRock's completed acquisition of HPS in July 2025 for $12 billion positioned the firm to execute precisely these kinds of strategic partnerships, combining HPS's specialized credit expertise with Citi's origination platform and client access.
The announcement underscores the consolidation and deepening partnerships within private credit markets, where scale, origination capability, and institutional relationships have become critical competitive advantages.
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