Investment
Strategies

What we do

Investment strategies

Hermance Capital Partners focuses on primary, secondary and co-investments across high-conviction strategies with attractive risk-return profiles in the three core private markets: Private Equity, Private Debt and Private Real Estate.

Focus on Buyout & Growth Strategies (investing since 2000)

Private Equity

Primary investments in the buyout universe have been part of our strategy for many decades. The team has been investing in the asset class since 2000 and has established strong relationships with top tier managers around the world. Our longstanding expertise and large network has allowed us to obtain access to the best performing funds and unique co-investment opportunities.

  • Partnership with top-tier managers with outstanding track records

  • Strong focus on managers who create value through operational improvements rather than through the use of leverage

  • Focus on Middle Market Buyout & Growth Equity strategies where managers have meaningful control and flexibility to transform businesses

  • Access to a large pool of investment opportunities, over 200’000 middle market companies in the US only

HCP US MidCap Buyout Fund (2016)

A selection of top-tier Midcap Buyout funds focused on acquiring private middle market companies located in North America, typically with enterprise values ranging from USD 100m to USD 1bn.  The underlying funds are managed by experienced and aligned investment teams with hands-on approaches who are able to create value in their investments through operational improvements.  The portfolio also benefits from a meaningful allocation to carefully selected co-investment opportunities.

7 funds
10 co-investments
74 portfolio companies

HCP Global Private Equity Fund II (2019)

Similar in construction to the successful HCP Midcap Buyout Fund, this portfolio consists of investments in private equity funds and co-investments managed by experienced and aligned teams. In addition to the investments in North America, this portfolio has the ability to invest in Europe and opportunistically in Asia. The fund keep the same focus on Middle market Buyout and Growth Equity strategies.

The investment selection is focused around two key themes: operational value creation and digitalization.  Hermance Capital Partners focuses on managers who are able to create value by implementing operational and strategic corporate improvement and notably improve the performance of the companies through the digitalization of internal processes. Moreover, the portfolio is constructed with a significant exposure to the Technology sectors alongside some of the best Technology funds on the market.

Focus on Corporate Credit & Real Estate Debt (investing since 2016)

Private Debt

The Private Debt market is expanding due to evolving regulations and macroeconomic dynamics. Private Debt is increasingly used as a replacement to traditional fixed income and as a diversifier in an alternative assets allocation due to its low volatility and high cash yield. Hermance Capital Partners has helped private and institutional investors build their allocation in this asset class with a focus on Corporate Credit and Real Estate debt across the US and Europe.

  • Investing in established private debt managers in the US and in Europe who have deep sourcing networks

  • Ability to generate equity-like returns with conservative downside risk

  • Short maturity on loans (3 years on average)

  • Yield generation due to high cash coupon

  • Less competitive markets leads to better protections

HCP – EU Private Real Estate Debt Fund (2016)

The European regulatory changes in the real estate financing market led to a significant banking retrenchment from the credit space and a market opportunity for specialized non-bank real estate debt funds. This Fund was created to capitalize on this opportunity and consists of a selection of well-established European private debt real estate managers providing direct financing to real estate sponsors. The portfolio is highly diversified across real estate sectors and countries, and is exposed to various loan types (senior, whole loans, mezzanine).

4 funds
77 investments

HCP Private Debt Opportunity Fund II (2020)

Private Debt has experienced tremendous growth since the 2008 financial crisis, as a result of the multiple new regulations (Basel III, IV, Solvency,…). The direct consequence of these regulations, was a progressive banking deleveraging and a growing market for direct lenders. The current Covid-19 pandemic has expanded the investment universe and decreased the competition even further, making it a perfect entry point for Private Debt investments. The Fund will invest in top-tier private debt managers underwriting loans to mid-market companies with robust financials and pursuing an expansion strategy. The Fund targets a high level of diversification across sectors and countries (US and Europe), targeting a portfolio of 5-10 funds and more than 100 underlying investments.

Focus on Value-Add and Opportunistic Strategies (investing since 2014)

Private Real Estate

A global approach to the real estate market is a prerequisite to enhance the risk-return profile of any real estate portfolio. Our team has a longstanding reputation in the Private Real Estate market worldwide and has been able to help clients build robust allocations to the asset class.

  • Collaboration with the top Private Real Estate managers in the world who have the required boots on the ground and decades of experience in un-locking value in private real estate transactions

  • Value creation through active engagement and transformation of depressed real estate assets

  • Providing geographical, asset type, vintage and strategy diversification

  • The ability to invest in global economic, demographic and social trends otherwise not available in domestic markets

  • Natural inflation hedge

HCP Global Private Real Estate Fund (2018)

The Fund is invested in well-known real estate managers who pursue primarily Value-Add and Opportunistic strategies.  Value-Add consists in repositioning properties through improvements and redevelopments with the aim of actively creating long-term value through capital appreciation and income enhancement.  An Opportunistic strategy focuses on distressed real estate transactions who require financial restructuring in order to complete or transform the asset and un-lock capital appreciation.  The portfolio is well diversified by geography, property types (commercial / industrial / residential) and investment strategies.

8 funds
1 co-investment
85 investments

HCP Global Private Real Estate Fund II

On the back of our successful HCP Global Private Real Estate Fund, this Fund will invest in top-tier private real estate managers who excel in Value-Add and Opportunistic strategies.  Through the Covid crisis, we have seen these strategies prove their resilience.  The real estate landscape has been profoundly impacted by the societal changes brought on by Covid and this new Fund will be well poised to take advantage of the new real estate paradigm.