Abu Dhabi's sovereign wealth fund Mubadala Investment Company has struck a $1 billion deal with Goldman Sachs to go after private credit deals in Asia, the companies said on Monday.
Mubadala and the U.S. bank agreed on a partnership to
co-invest in private credit opportunities in the Asia Pacific region, with a
particular focus on India, the companies said in a statement.
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 on
opportunities in distressed debt amid a high interest rate environment.
Last year, Goldman Sachs announced it was opening a new
office in Abu Dhabi, marking a significant milestone for the Wall Street bank
since 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 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 $300 billion Mubadala, one of Abu Dhabi's three main
sovereign wealth funds, alongside Abu Dhabi Investment Authority and ADQ.
In March last year, Mubadala forged a joint venture with
Ares to invest in global credit markets opportunities, starting with an initial
target of $1 billion.
In the same year, it committed another $1 billion to
U.S.-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 9 billion dirhams ($2.5 billion) over five
years in credit markets, with the two companies leveraging on Mubadala's
relationship with U.S. 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, Mubadala's CEO said the firm's investment focus would increasingly
shift towards Asia.