ABU Dhabi’s sovereign wealth fund Mubadala Investment Company has struck a US$1 billion deal with Goldman Sachs to go after private credit deals in Asia, the companies said on Monday (Feb 26).
Mubadala and the US bank agreed on a partnership to co-invest in private credit opportunities in the Asia-Pacific region, with a particular focus on India. The partnership will be managed by Private Credit at Goldman Sachs Alternatives, with a dedicated on-the-ground team across multiple Asia-Pacific markets, Mubadala and Goldman said.
The Abu Dhabi sovereign investor has been building up its exposure to private credit markets through partnerships, leveraging opportunities in distressed debt amid a high-interest-rate environment.
Last year, Goldman Sachs announced it was opening a new office in Abu Dhabi. This marked a significant milestone for the Wall Street bank, after it was sidelined from any new business in the capital of the United Arab Emirates for its involvement in the 1MDB scandal.
The bank said the new office will complement the firm’s growing regional presence, allowing the firm to deepen relationships with clients and meet them where they are.
Money managers are vying for a slice of the growing private credit market that emerged after the 2008 global financial crisis. Private credit funds are increasingly competing with banks, including for financing large company buyouts.
That has attracted the attention of sovereign wealth funds in the Gulf, including the US$300 billion Mubadala, one of Abu Dhabi’s three main sovereign wealth funds, alongside Abu Dhabi Investment Authority and ADQ.
Last March, Mubadala forged a joint venture with Ares to invest in global credit markets opportunities, starting with an initial target of US$1 billion.
In the same year, it committed another US$1 billion to US-based Blue Owl Capital’s credit platform, that will initially focus on providing financing for technology companies.
Mubadala and UAE-based conglomerate Alpha Dhabi last year announced plans to deploy up to nine billion dirhams (S$3.3 billion) over five years in credit markets, with the two companies leveraging Mubadala’s relationship with US asset manager Apollo “to access high-quality private credit investment opportunities”.
Mubadala has been investing in private debt opportunities through its credit investment unit since 2009, mostly in North America and Europe, but has recently strengthened its exposure in the Asia-Pacific. Late last year, chief executive officer Khaldoon Al Mubarak said the firm’s investment focus would increasingly shift towards Asia.
