Goldman strikes $1 billion private credit deal with Mubadala
Goldman Sachs Group Inc. has clinched $1 billion from Mubadala Investment Co. to scour for more private credit deals in Asia. The Abu Dhabi sovereign wealth fund and Goldman’s asset-management arm struck a partnership to invest alongside each other in the Asia-Pacific region, with a particular focus on India. The pact follows a similar mandate the New York-based firm received from the Ontario Municipal Employees Retirement System in September.
“Some of the investors might be underpenetrated across private credit in general and they are looking at getting more exposure across this asset class,” James Reynolds, the head of direct lending at Goldman’s money management unit, said in an interview. “That’s where partnering with these powerful institutions creates a win-win.” The $1.7 trillion private credit market has more than doubled in size over the past five years as investors flocked to the asset class seekand ing higher returns. It’s quickly established itself as a permanent investment bucket for pension funds, endowments sovereign wealth funds and became a major source of funding for companies and private equity firms. For years, investors across the Middle East showed little interest in private debt: the asset class offered yields that were too low for their return targets. Yet higher interest rates and the market’s overall growth have recently led to a shift in sentiment.
Institutions like Mubadala and the Abu Dhabi Investment Authority have struck partnerships to strengthen their presence in the market and managers including Blue Owl Capital Inc. and Hayfin Capital Management have expanded their presence in the region to drum up business.
While North America and Europe have gotten crowded with dozens of private credit firms looking to lend money directly to companies—mostly in the context of leveraged buyouts—the market is significantly less developed in Asia Pacific. Goldman is among the few private credit titans making a big push into the region. Som Krishna helps run the asset management unit’s credit business in Asia.
“What these markets need is a blossoming, growing private equity industry,” Reynolds said. “We want to partner up with investors who want to have Asia exposure and they want to go with a platform that has experience and track record.”
The $1.7 trillion private credit market has more than doubled in size over the past five years