UAE-based Alpha Dhabi Holding (ADH) and the Gulf state’s sovereign wealth fund Mubadala Investment Co Thursday announced the formation of a joint venture to co-invest in credit opportunities.
Both companies aim to collectively deploy up to about $2.5 billion (AED 9 billion) over the next five years, leveraging the wealth fund’s long-term and strategic partnership with Apollo, one of the world’s largest alternative asset managers, to access high-quality private credit investment opportunities, as per a joint press release.
Mubadala will hold an 80% stake in the Abu Dhabi Global Market-based joint venture entity, with the remaining 20% to be held by Alpha Dhabi.
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 current operating macroenvironment with rising interest rates and inflationary pressures. Private credit investments are well placed to perform across market cycles, despite the current uncertain and volatile global capital markets landscape.
We have continued to assess the private credit market asset class recently with a keen interest, particularly given the current global market environment. 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,” Alpha Dhabi CEO and Managing Director Hamad Salem Al Ameri said in the statement.
“The asset class provides further diversification to our portfolio and attractive risk adjusted returns.”
“By leveraging our strong existing relationship with Apollo, and combining Mubadala and Alpha Dhabi’s investment expertise and capital, we have created a powerful platform to access investment opportunities around the world while driving synergies across Abu Dhabi’s ecosystem,” noted Hani Barhoush, CEO of Disruptive Investments at Mubadala.
