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Abu Dhabi Investment Company, commonly known as Invest AD, a wholly-owned subsidiary of Mubadala Investment Company, has launched a vehicle that allows UAE investors to invest in private credit.
The Invest AD Blackstone Private Debt Fund, a fund regulated by the UAE Securities and Commodities Authority, will provide “local access to Blackstone’s U.S. and European private credit strategies,” Invest AD said on Monday.
It is the UAE’s first global private credit fund vehicle aimed at professional investors, broadening investment opportunities in an asset class “historically invested primarily by institutional investors,” the company said.
Mohammad Saleemi, CEO of Invest AD, said: “This strategic partnership with Blackstone will enable us to offer our clients a semi-liquid private credit platform.”
“Private credit has the potential to generate strong returns as part of an investor’s portfolio, and we look forward to working with leaders in the space to expand exposure to this asset class.”
Demand for private credit (loans provided to businesses by financial institutions other than banks) has increased significantly in recent years.
Unlike most bank loans, private credit solutions can be tailored to meet the needs of the borrower in terms of transaction size, type or timing.
A report from Morgan Stanley shows that the private credit market size will be approximately US$1.4 trillion at the beginning of 2023, compared with US$875 billion in 2020, and is expected to grow to US$2.3 trillion by 2027.
Blackstone Credit is one of the world’s largest credit managers and currently accounts for more than half of Blackstone’s $295 billion credit and insurance platform.
It invests primarily in senior secured debt of large private companies in the United States and Europe.
Rashmi Madan, head of Europe, Middle East and Africa at Blackstone Private Wealth Solutions, said the partnership with Invest AD will “expand access to institutional high-quality private credit solutions for clients, as we do in markets around the world”.
“We are seeing strong demand for private credit today [and] We believe the current double-digit yields in this asset class provide a compelling opportunity to earn returns similar to historical equity performance while assuming senior secured risk. “
Updated: October 23, 2023 1:04 pm
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