Alpha Dhabi Holding and Abu Dhabi sovereign wealth fund Mubadala are to form a joint venture to invest in credit opportunities.
The two entities said they will collectively deploy AED 9 billion ($2.45 billion) over five years leveraging Mubadala’s long-term partnership with New York-listed alternative asset manager Apollo.
Mubadala will hold 80% ownership in the Abu Dhabi Global Market-based joint venture entity, with the remaining 20% to be held by Alpha Dhabi.
“We have continued to assess the private credit market asset class recently with a keen interest, particularly given the current global market environment,” said Hamad Salem Al Ameri, CEO and Managing Director of Alpha Dhabi.
“We are proud to partner with Mubadala and Apollo – both of which are renowned in this space – to address the global market need for alternative forms of liquidity and credit. The asset class provides further diversification to our portfolio and attractive risk adjusted returns.”
Craig Farr, Apollo Partner and Head of Apollo Capital Solutions, noted that now is an “attractive time” to deploy capital across private credit markets.
“At Apollo, we believe this is an attractive time to deploy capital across private credit markets and are excited to continue building our relationships with Mubadala and Alpha Dhabi, coming together at a time when private markets are prime for investment against a backdrop of broader public market stress.” Farr said.
A joint statement from the companies said allocations to the private credit asset class have continued to gain traction and increase regionally and are seen as a route to generate strong returns while providing effective downside protection.
“This is particularly pertinent in the context of the current operating macroenvironment with rising interest rates and inflationary pressures,” the statement said. “Private credit investments are well placed to perform across market cycles, despite the current uncertain and volatile global capital markets landscape.”
(Reporting by Imogen Lillywhite; editing by Cleofe Maceda)