Hyland Hill Investment Partners, an alternative credit investment firm focused on acquiring small balance private loans in North America, closed its inaugural $250 million fund, Hyland Hill Fund I. The fund will seek to generate superior rates of return by investing in undervalued opportunities in private credit and adjacent asset classes, including real estate owned by lenders, operating businesses that are adjacent to private credit and joint ventures investing in private credit.

The firm will leverage its team’s deep network of relationships and significant investment expertise to source and execute on often overlooked opportunities to provide capital and acquire performing, sub-performing and non-performing loans originated by community, regional and national banks as well as other financial institutions. The firm also intends to originate recovery loans secured by commercial real estate.

Hyland Hill’s founding partners include:

• Jason Spaeth, CEO and chief investment officer. A credit industry veteran, Spaeth previously spent more than two decades at Värde, where he was a managing partner investing in distressed business and household credit across North America, Europe, and Asia. He opened and managed Värde’s European office, and later led its North American private credit business, which invested approximately $5 billion following the great financial crisis.

• Jeff Thuringer, partner & head of business loan investments. Thuringer brings significant expertise across private credit, corporate trading and commercial banking to the firm. He previously spent 15 at Värde, most recently serving as a senior managing director helping to lead the U.S. private credit business. There, Thuringer was responsible for the day-to-day management and investment execution of a $750 million CRE mortgage fund, which acquired performing and sub-performing mortgage loans and originated bridge loans.
• Chris Giles, partner & head of household investments. Giles has more than 25 years of investing experience across private credit. He previously spent 15 years at Värde, most recently as a senior managing director, where he focused on managing the household investment business in North America, which specialized in consumer and residential mortgage loan transactions.

“We are pleased with the significant support we have received for our inaugural Fund, which we believe is a testament to not only the strength of the team we have assembled, but also the tremendous opportunity set that exists for our investment strategy,” Spaeth said. “We estimate that the U.S. loan market is between $15-20 trillion in size and growing, and believe we are well positioned to become a financing solution of choice in an attractive segment of the market often under-trafficked by other investors.”

The fund’s investment process will allow Hyland Hill to provide recovery capital to borrowers as well as acquire loans across both the business and household sectors – including commercial and industrial loans, commercial real estate loans, and unsecured and secured consumer loans – that are undergoing a catalyst event and have the potential to be monetized over a shorter time horizon.

“While history doesn’t always repeat itself, it rhymes. As stress in the economic system continues to hit Main Street, we expect small businesses in particular will require capital as they increasingly face headwinds related to rising costs, supply chain issues, labor shortages, weakening consumer spending and reduced government support,” Spaeth said. “Against this backdrop, we also expect more regional and community banks will seek qualified buyers to acquire loan portfolios and assets on their balance sheets. We look forward to leveraging our experience investing across collateral types and market cycles to creatively help companies and financial counterparties navigate complex situations, while generating attractive returns for our investors.”