Mubadala Investment Company, the Abu Dhabi sovereign wealth fund, has announced plans to open its $25 billion private credit business to outside investors. This strategic move aims to leverage the increasing appeal of private credit as an asset class and to further expand Mubadala's investment reach and capabilities within this sector.
The decision to welcome external capital coincides with a broader shift in the financial landscape, where private credit has gained significant traction. This asset class offers non-bank lending solutions and has seen substantial growth, with industry estimates placing its assets under management beyond the $1 trillion mark. Mubadala's deep-seated relationships with major global asset managers such as Apollo Global Management, The Carlyle Group, and KKR are expected to be instrumental in this expansion, facilitating broader origination, risk analytics, and administrative support for a diverse range of credit facilities.
Waleed Al Mokarrab Al Muhairi, Mubadala’s deputy group chief executive officer, has consistently emphasized the importance of diversification and disciplined risk management in the fund's approach to private credit. He noted at a recent conference that while performance can be cyclical, a well-constructed and diversified portfolio mitigates structural risks. Previously, Al Muhairi also highlighted that private credit has been Mubadala's best-performing asset class for three consecutive years.
Mubadala has been a highly active player in the private credit space, committing approximately $20 billion to its portfolio. Recent initiatives include a $2.5 billion joint venture with Alpha Dhabi Holding, focusing on private credit opportunities, and a $1 billion pact with Goldman Sachs Group Inc. to target private credit deals in Asia, particularly India. These partnerships underscore Mubadala's strategy to collaborate with established asset managers to enhance deal flow and manage risk effectively.
