H.I.G. WhiteHorse $5.9B Fund Launch

H.I.G. WhiteHorse, the direct lending credit affiliate of H.I.G. Capital, has announced the final closing of its H.I.G. WhiteHorse Middle Market Lending Fund IV, raising $5.9 billion in assets.

The fund continues H.I.G. WhiteHorse's strategy of originating senior secured loans for U.S. middle market companies, focusing on businesses with EBITDA generally between $30 million and $100 million. With this latest fund, H.I.G. WhiteHorse aims to provide debt financing solutions to both sponsor-backed and non-sponsor middle market firms, leveraging its team of 85 credit professionals and a broad U.S. and European presence.

The firm states that Fund IV attracted a global and diversified group of limited partners:

• Public and private sector pensions

• Sovereign wealth funds

• Endowments

• Foundations

• Consultants

• Financial institutions

• and family offices from North America, Europe, Asia, and the Middle East. H.I.G.

WhiteHorse has previously invested approximately $18 billion in U.S. direct lending transactions and participated in more than 285 middle market company deals, primarily via senior secured floating rate loans.

H.I.G. Capital, which oversees $70 billion in assets under management, is recognized as a major player in alternative investments, focusing on both debt and equity in the middle-market segment and providing flexible, value-added capital solutions.

How can smaller alternative lenders position themselves as institutional capital floods the market?

For smaller alternative lenders, the influx of institutional players can feel daunting but also presents unique opportunities:

• Focus on Niche Segments: Large funds like H.I.G. WhiteHorse usually target the core middle market (e.g., companies with $30–100 million EBITDA). The lower middle market (companies below this range) remains less crowded and appeals to borrowers seeking tailored solutions, expertise, and relationship-driven underwriting that big funds may find less economically efficient to pursue.

• Emphasize Flexibility and Speed: Smaller lenders can often underwrite, structure, and close deals more quickly, with decision-makers closer to the process. This is valuable to borrowers with urgent, complex, or special-situation needs who may not fit the “cookie-cutter” profile required by larger funds.

• Build Deep Relationships and Add Value: You can differentiate by offering guidance, operational support, or follow-on capital, nurturing trusted relationships that larger, process-driven institutions may overlook.

• Better Terms (for Lenders): While upper middle market borrowers benefit from tighter lender competition, the lower middle market still offers higher yields, tighter covenants, and less leverage, compensating for increased risk and limited liquidity.

• Specialize by Industry or Situation: Carving out a reputation as a specialist (e.g., in healthcare, technology, or family-owned businesses) allows smaller lenders to become the “go-to” partner for deals larger funds may not fully understand or value.

• Target Geographic Markets with Local Relationships: While institutional funds operate nationally with standardized processes, smaller lenders who deeply understand specific regional markets can leverage local banking relationships, industry networks, and on-the-ground market knowledge to win deals that remote underwriters might misjudge or overlook entirely.

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