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Securing yield through long-term direct lending partnerships.


The Direct Lending strategy aims to consistently outperform for our investors by lending to attractive, growing businesses on terms seeking capital preservation and yield capture.

Patrick Marshall

Head of Private Debt and CLOs

Focused on quality

Access to the stable, low-correlated returns offered by senior-secured loans to middle-market businesses in the UK and Europe.

UK focus, regional scope

Concentrating on the UK, the largest and most creditor-friendly lending market in Europe, while retaining the flexibility to invest across the continent.

Strong origination

A joint-venture agreement with RBS’s UK corporate lending arm, plus the team’s own contacts in the loan market, provides a consistent flow of high-quality investment opportunities.

Experience throughout cycles

The team has an average of 16 years’ experience and can successfully structure, execute, monitor and restructure loans.

Inflation protection

The coupon payments of senior-secured bonds move in sync with interest rates, preserving value in inflationary periods and providing a base return when rates are low.

Enduring opportunity

Banks continue to withdraw from the business-lending market, enabling direct lenders to partner with mid-market businesses – a shift supported by European governments.

The Hermes Direct Lending Cycle


Strategy Information

  • Target Return: LIBOR plus 6% gross annualised
  • Universe: Senior loans to UK and European mid-market businesses
    − UK exposure: 75%-100%
    − European exposure: 0%-25%
  • Eligible instruments: Senior-secured loans: 75%-100% of portfolio, unitranche loans: 0%-25% of portfolio
  • Targeted leverage: Leverage below 5.5x for senior-secured loans/6.5x on unitranche loans
  • Fees: Management fee: 75bps, Performance fee: 10% of returns exceeding LIBOR + 4.5% net per annum, compounded annually
  • Base currency: GBP, with limited hedge on foreign currency exposure

This document has been prepared using information which is confidential and proprietary to The National Westminster Bank plc (“we”, “us” and “our”). This document and any dispute arising under or in connection therewith is to be governed by and construed in accordance with English law.  

This document is being issued to you (the “Recipient” or “you” or “your”) by Hermes Investment Management Limited (“Hermes”) solely in connection with your potential investment in a direct lending fund being established by Hermes (the “Specified Purpose”).

National Westminster Bank plc and Hermes (the “Institutions”) are separate institutions each acting on their own behalf and not as agent or for the benefit of any other person. Nothing in this material is intended to, or shall be deemed to: (i) establish or represent any partnership or joint venture between the Institutions; (ii) constitute any Institution as the agent of the other Institution; or (iii) constitute any Institution making or entering into any representation, commitment or assurance of any kind for or on behalf of any other Institution.

Any information in this document which relates to or refers to National Westminster Bank plc and/or its Financial Sponsors business (“National Westminster Bank plc Confidential Information”) is confidential and must not be disclosed in a manner inconsistent with the Specified Purpose. Where you have entered into a confidentiality agreement with Hermes in respect of this document and/or the National Westminster Bank plc Confidential Information you must comply at all times with the terms of any such confidentiality agreement(s) and the use restrictions therein.

This document does not constitute an offer or invitation by National Westminster Bank plc in respect of the Specified Purpose or any financing or any other sale or purchase of securities. The National Westminster Bank plc Confidential Information is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation and must not be reproduced or disclosed (in whole or in part) to any other person without our prior written consent.

The National Westminster Bank plc Confidential Information is not and does not purport to be comprehensive and we have no obligation to update it. Any information in this document provided by National Westminster Bank plc has not been verified independently. The National Westminster Bank plc Confidential Information is provided on a strictly non-reliance basis and should not be relied upon as the basis for an investment decision. In compiling the National Westminster Bank plc Confidential Information we have relied upon and assumed, without verification, the accuracy and completeness of all information available to us. No representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by National Westminster Bank plc or any of its affiliates or by any of its respective officers, employees or agents in relation to the accuracy or completeness of any part of this document or any other written or oral information made available to you, your affiliates, connected companies, employees or advisers (and any such liability is expressly disclaimed). In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievement or reasonableness of any returns, projections, estimates, valuations or prospects contained in any part of this document or in such other written or oral information.

The Recipient acknowledges and agrees that no person has, nor is held out as having any authority to give any statement, warranty, representation, or undertaking on behalf of National Westminster Bank plc in respect of the National Westminster Bank plc Confidential Information. We give no undertaking to provide the Recipient with access to any additional information, to determine the accuracy or reasonableness of information or assumptions, to update this document or any additional information, or to correct any inaccuracies in it which may become apparent. Any views expressed in this document in respect of National Westminster Bank plc Confidential Information (including statements or forecasts) constitute the judgment of National Westminster Bank plc as of the date given and are subject to change at any time without notice.

You are solely responsible for compliance with law and regulations which may apply to this document and the Specified Purpose in jurisdictions applicable to you and your affiliates. This document does not constitute an offer to sell or an invitation to purchase securities in any jurisdiction. The National Westminster Bank plc Confidential Information is not to be construed as legal, tax, regulatory, accounting, investment or business advice, and is not intended to form the basis of any investment decision. You should consult your own advisers on such matters as you deem appropriate.

This document is provided to you on the basis that you understand that National Westminster Bank plc is not providing you with any "investment advice" within the meaning of Article 53 of the FSMA 2000 (Regulated Activities) Order 2001 and as a result, National Westminster Bank plc is under no obligation to assess the suitability of the information provided in light of your knowledge and experience, financial situation and/or investment objectives. A consequence of the above is that National Westminster Bank plc will not provide you with advice on the merits of buying, selling, subscribing for or underwriting (or exercising rights to acquire, dispose of or underwrite) any particular investment instrument. As such, you acknowledge that you are capable of interpreting the information provided in this document and using that information to take decisions as regards the merits of investing in particular investment instruments.

By accepting this document, you agree to be bound by the foregoing limitations.

The Royal Bank of Scotland plc. Registered in Scotland No 90312. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. Authorised by the Prudential Regulation Authority (the “PRA”) and regulated by the Financial Conduct Authority ( the “FCA”) and the PRA. National Westminster Bank Plc.  Registered in England and Wales No 929027.  Registered Office: 250 Bishopsgate London EC2M 4AA.  Authorised by the PRA and regulated by the FCA and PRA.  The Royal Bank of Scotland plc is authorised to act as agent for National Westminster Bank Plc.


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