Saturday, April 20, 2024

Mubadala signs $2.5bn private credit deal with Alpha Dhabi

The Mubadala sovereign wealth fund has launched a joint venture with Alpha Dhabi, a U.A.E conglomerate, to make private credit investments, one of the hottest areas of alternatives as 2023 begins.

The $284bn SWF plans to deploy about $2.5bn into the space in the next five years, leveraging its existing partnership with US alternatives giant Apollo.

The joint venture will be based in Abu Dhabi Global Market, with Mubadala owning 80% and Alpha Dhabi, the third-biggest listed entity in the United Arab Emirates, the other 20%.

“Global private credit markets are entering a period of significant growth,” said Hani Barhoush, CEO of Disruptive Investments at Mubadala.

“By leveraging our strong existing relationship with Apollo, and combining Mubadala and Alpha Dhabi’s investment expertise and capital, we have created a powerful platform to access investment opportunities around the world.”

Craig Farr, Apollo partner and head of capital solutions, said private markets were currently “prime for investment against a backdrop of broader public market stress.”

Hamad Salem Al Ameri, CEO and managing director of Alpha Dhabi, said they were “proud” to partner with Mubadala and Apollo, “both of which are renowned in this space.”

The deal speaks to two significant trends: growing investment in private credit by allocators globally and growing investment in alternatives by Middle-Eastern sovereign wealth funds, which continue to be major drivers of growth in the space.

It follows news in October that Mubadala was partnering with US asset manager KKR in a $1bn private credit co-investment focused on Asia-Pacific.

The pair said they would invest at least $1bn in long-term capital, “providing bespoke credit solutions to companies and sponsors.”

You may also be interested:

Mubadala Capital strikes $2.1bn private equity deal with Ardian

Stuart Fiertz on Cheyne’s private credit shift

Analysis: Allocator trends that shaped 2022