HPS Corporate Lending Fund's Assets Soar to $24.6B Amid Rising Income, Leverage

TL;DR

**HPS Corporate Lending Fund is aggressively leveraging up to chase higher returns, but watch out for the foreign currency hit and slight NAV dip.**

AI Summary

HPS Corporate Lending Fund reported a significant increase in total assets, reaching $24.59 billion as of September 30, 2025, up from $16.63 billion at December 31, 2024. Total investment income for the nine months ended September 30, 2025, surged to $1.53 billion, compared to $1.02 billion for the same period in 2024. Net investment income after excise tax also saw a substantial rise to $795.62 million for the nine months ended September 30, 2025, from $545.90 million in the prior year. However, the fund experienced a net realized and change in unrealized loss of $140.82 million for the nine months ended September 30, 2025, a notable shift from a gain of $79.64 million in 2024, primarily driven by foreign currency forward contracts and translation of foreign currency assets and liabilities. Debt increased significantly to $12.20 billion from $7.45 billion, reflecting increased leverage. Net assets grew to $11.72 billion from $8.73 billion, supported by $3.37 billion in proceeds from common shares issued during the nine months ended September 30, 2025. The net asset value per share for all classes (I, D, F, S) slightly decreased to $25.27 from $25.59.

Why It Matters

This filing reveals HPS Corporate Lending Fund's aggressive growth strategy, with a 47.8% increase in total assets and a 49.9% jump in total investment income year-over-year. For investors, the significant increase in debt to $12.20 billion from $7.45 billion indicates higher leverage, which could amplify returns but also magnify risks, especially given the slight decline in NAV per share. Employees and customers of the fund's portfolio companies might see continued investment and stability, but the competitive landscape for corporate lending remains intense, with other funds also seeking high-yield opportunities. The broader market will watch how this increased leverage performs in a potentially sustained elevated interest rate environment, as outlined in the forward-looking statements.

Risk Assessment

Risk Level: high — The fund's debt increased by 63.8% to $12.20 billion from $7.45 billion, significantly increasing leverage. Furthermore, the net realized and change in unrealized gain (loss) shifted from a gain of $79.64 million in the nine months ended September 30, 2024, to a loss of $140.82 million in the same period of 2025, largely due to foreign currency forward contracts and translation of foreign currency assets and liabilities, indicating significant exposure to market and currency volatility.

Analyst Insight

Investors should scrutinize the fund's increased leverage and foreign currency exposure. While investment income is up, the substantial unrealized losses and increased debt warrant caution. Consider if the potential for amplified returns justifies the heightened risk profile, especially in a volatile interest rate and currency environment.

Financial Highlights

debt To Equity

1.03

revenue

$1.53B

operating Margin

N/A

total Assets

$24.59B

total Debt

$12.20B

net Income

$795.62M

eps

$25.27

gross Margin

N/A

cash Position

$419.33M

revenue Growth

+49.9%

Key Numbers

• $24.59B — Total Assets (Increased by 47.8% from $16.63B at December 31, 2024, indicating significant growth.)
• $1.53B — Total Investment Income (Up 49.9% from $1.02B in the prior year, showing strong revenue generation.)
• $795.62M — Net Investment Income after Excise Tax (Increased by 45.7% from $545.90M, reflecting improved operational profitability.)
• $12.20B — Debt (Increased by 63.8% from $7.45B, indicating higher financial leverage.)
• ($140.82M) — Net Realized and Change in Unrealized Gain (Loss) (A significant shift from a $79.64M gain in 2024, primarily due to foreign currency impacts.)
• $25.27 — Net Asset Value per Share (Slightly decreased from $25.59, despite overall asset growth.)
• 463,690,115 — Common Shares Issued and Outstanding (Increased from 341,366,636 shares, reflecting capital raising efforts.)
• $3.37B — Proceeds from Shares Sold (Significant capital raised from common share issuance during the nine months.)

Key Players & Entities

• HPS Corporate Lending Fund (company) — Registrant
• HPS Advisors, LLC (company) — Adviser
• $24,590,618 (dollar_amount) — Total assets as of September 30, 2025
• $16,629,739 (dollar_amount) — Total assets as of December 31, 2024
• $1,525,995 (dollar_amount) — Total investment income for nine months ended September 30, 2025
• $1,018,014 (dollar_amount) — Total investment income for nine months ended September 30, 2024
• $12,201,884 (dollar_amount) — Debt as of September 30, 2025
• $7,445,580 (dollar_amount) — Debt as of December 31, 2024
• $11,719,595 (dollar_amount) — Total net assets as of September 30, 2025
• $25.27 (dollar_amount) — Net asset value per share as of September 30, 2025

FAQ

Risk Factors

• Leverage and Debt Risk [high — financial]: The fund significantly increased its debt by 63.8% to $12.20 billion from $7.45 billion. This heightened leverage amplifies both potential gains and losses, making the fund more sensitive to interest rate fluctuations and market downturns.
• Foreign Currency Fluctuations [high — market]: The fund experienced a net realized and change in unrealized loss of $140.82 million, a substantial shift from a $79.64 million gain in the prior year. This was primarily driven by foreign currency forward contracts and translation of foreign currency assets and liabilities, indicating significant exposure to currency volatility.
• Investment Value Volatility [medium — market]: Despite a 47.8% increase in total assets to $24.59 billion, the net asset value per share slightly decreased to $25.27 from $25.59. This suggests that while the fund is growing in size, the fair value of its investments may be experiencing downward pressure or that the new capital is not yet fully deployed effectively.
• Capital Raising and Deployment [medium — operational]: The fund raised $3.37 billion from common share issuances, leading to an increase in outstanding shares to 463,690,115. Effective deployment of this new capital is crucial to maintain or grow NAV per share and justify the increased leverage.

Industry Context

The corporate lending sector, particularly direct lending, continues to be a significant area for institutional investors seeking yield. However, rising interest rates and economic uncertainty create a challenging environment. Funds like HPS are navigating this by increasing scale and leverage, but must carefully manage credit risk and market volatility.

Regulatory Implications

As a registered investment company, HPS Corporate Lending Fund is subject to regulations governing investment advisers and publicly traded funds. Increased leverage and complex financial instruments like derivatives necessitate robust compliance and risk management to avoid regulatory scrutiny and potential penalties.

What Investors Should Do

1. Monitor NAV per Share Trend
2. Assess Leverage Risk
3. Evaluate Foreign Currency Exposure Management
4. Analyze Investment Income vs. Unrealized Losses

Glossary

Amortized Cost

The original cost of an investment, adjusted for the amortization of any premium or discount over its remaining life. It is used as a measure of the investment's value. (Provides context for the fair value of investments, showing the difference between the book value and market value.)

Derivative Assets/Liabilities

Financial instruments whose value is derived from an underlying asset, index, or rate. They can be used for hedging or speculation. (The change in fair value of derivative assets and liabilities, particularly foreign currency contracts, significantly impacted the fund's net realized and change in unrealized gains/losses.)

Net Asset Value (NAV) per Share

The total value of a fund's assets minus its liabilities, divided by the number of outstanding shares. It represents the per-share market value of the fund. (A key metric for investors to assess the fund's performance and value, which slightly decreased despite overall asset growth.)

Leverage

The use of borrowed money to increase the potential return on an investment. In this context, it refers to the fund's use of debt. (The fund has significantly increased its leverage, which amplifies both potential gains and losses.)

Year-Over-Year Comparison

Compared to December 31, 2024, HPS Corporate Lending Fund has experienced substantial growth in total assets, up 47.8% to $24.59 billion, and a significant increase in total investment income, up 49.9% to $1.53 billion for the nine months. However, this growth is accompanied by a 63.8% rise in debt to $12.20 billion, indicating increased leverage. A notable shift occurred in realized and unrealized gains/losses, moving from a gain of $79.64 million to a loss of $140.82 million, primarily due to foreign currency impacts, which also contributed to a slight decrease in NAV per share from $25.59 to $25.27.

Key Financial Figures

• $0.01 — Yes No The Registrant's Common Shares, $0.01 par value per share, outstanding as of

Filing Documents

• hps-20250930.htm (10-Q) — 12927KB
• exhibit311q3202510q.htm (EX-31.1) — 10KB
• exhibit312q3202510q.htm (EX-31.2) — 10KB
• exhibit321q3202510q.htm (EX-32.1) — 5KB
• exhibit322q3202510q.htm (EX-32.2) — 5KB
• 0001838126-25-000073.txt ( ) — 40269KB
• hps-20250930.xsd (EX-101.SCH) — 106KB
• hps-20250930_cal.xml (EX-101.CAL) — 91KB
• hps-20250930_def.xml (EX-101.DEF) — 718KB
• hps-20250930_lab.xml (EX-101.LAB) — 978KB
• hps-20250930_pre.xml (EX-101.PRE) — 846KB
• hps-20250930_htm.xml (XML) — 13367KB

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 58 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 116 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 140 Item 4.

Controls and Procedures

Controls and Procedures 141 PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 142 Item 1A.

Risk Factors

Risk Factors 142 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 142 Item 3. Defaults Upon Senior Securities 143 Item 4. Mine Safety Disclosures 143 Item 5. Other Information 143 Item 6. Exhibits 143

Signatures

Signatures Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about HPS Corporate Lending Fund (together, with its consolidated subsidiaries, the "Company", "we" or "our"), our current and prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. Words such as "anticipates," "expects," "intends," "plans," "will," "may," "continue," "believes," "seeks," "estimates," "would," "could," "should," "targets," "projects," "outlook," "potential," "predicts" and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation: our future operating results; our business prospects and the prospects of our portfolio companies, including our and their ability to achieve our respective objectives as a result of inflation, the imposition of tariffs, increases in borrowing costs and a potential global recession; the impact of geo-political conditions, including revolution, insurgency, terrorism or war, including those arising out of the ongoing conflict between Russia and Ukraine and the broader Middle East conflict; the impact of the investments that we expect to make; our ability to raise sufficient capital to execute our investment strategy; our current and expected financing arrangements and

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Consolidated Financial Statements

Item 1. Consolidated Financial Statements. HPS Corporate Lending Fund Consolidated Statements of Assets and Liabilities (in thousands, except share and per share amounts) September 30, 2025 December 31, 2024 ASSETS (Unaudited) Investments at fair value Non-controlled/non-affiliated investments (amortized cost of $ 23,179,530 and $ 15,753,920 at September 30, 2025 and December 31, 2024, respectively) $ 23,408,973 $ 15,790,937 Non-controlled/affiliated investments (amortized cost of $ 99,213 and $ 19,411 at September 30, 2025 and December 31, 2024, respectively) 99,531 19,969 Controlled/affiliated investments (amortized cost of $ 306,422 and $ 297,747 at September 30, 2025 and December 31, 2024, respectively) 328,116 320,350 Total investments at fair value (amortized cost of $ 23,585,165 and $ 16,071,078 at September 30, 2025 and December 31, 2024, respectively) 23,836,620 16,131,256 Cash and cash equivalents 419,328 228,899 Interest receivable from non-controlled/non-affiliated investments 187,650 140,686 Interest receivable from non-controlled/affiliated investments 200 — Dividend receivable from non-controlled/non-affiliated investments 43 68 Deferred financing costs 49,905 41,633 Deferred offering costs 332 915 Derivative assets, at fair value (Note 6) 60,013 43,003 Receivable for investments 35,759 32,428 Other assets 768 10,851 Total assets $ 24,590,618 $ 16,629,739 LIABILITIES Debt (net of unamortized debt issuance costs of $ 94,323 and $ 51,573 at September 30, 2025 and December 31, 2024, respectively) $ 12,201,884 $ 7,445,580 Payable for investments purchased 105,033 75,489 Interest payable 153,293 104,735 Derivative liabilities, at fair value (Note 6) 8,661 11,510 Due to affiliates 10,501 13,881 Distribution payable (Note 9) 98,172 71,896 Payable for share repurchases (Note 9) 176,365 110,784 Management fees payable (Note 3) 12,185 9,377 Income based incentive fees payable (Note 3) 43,474 32,014 Capital gains incentive fe

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