Goldman Sachs and Abu Dhabi sovereign wealth fund Mubadala Investment Company have signed a $1-billion deal to launch a separately managed account to co-invest in private credit opportunities in the Asia Pacific, the companies said on Monday.
The partnership, which will be managed by Private Credit at Goldman Sachs Alternatives, will enable both firms to continue scaling their investment activity in the growing Asia-Pacific credit market, they said.
The mandate involves deploying $1 billion of long-term capital, offering customised private credit solutions to high-quality companies and sponsors throughout the Asia-Pacific region, with a particular focus on India.
The pact follows a similar mandate that the asset management arm of New York-based Goldman sealed with the Ontario Municipal Employees Retirement System (OMERS) in September 2023. Goldman did not disclose the financial terms of its partnership with OMERS, one of Canada’s biggest pension funds.
“We believe we are at the early stages of a defining era for private credit in the Asia Pacific,” said Greg Olafson, global head of Private Credit at Goldman Sachs Alternatives, in a statement.
Olafson said that the region offers “expansive” opportunities in private credit due to its strong economic growth and favourable conditions for private lenders to support the growth of companies by providing flexible, long-term capital.
The Asia-Pacific credit market is a new yet increasingly attractive set of opportunities for many Middle-Eastern investors. Bloomberg reported in September that Barclays was pursuing a partnership with AGL Credit Management, with anchor capital from the Abu Dhabi Investment Authority, to invest in the private credit market. Prior to the partnership with Goldman, Mubadala has already struck deals with Ares Management Corp and Blue Owl Capital.
Since 2009, Mubadala’s Credit Investments unit has been investing in private debt opportunities, with a focus on direct lending to middle-market and large-cap companies across a variety of industries and asset classes. Mubadala’s credit investments have primarily been made in North America and Europe, while the Asia Pacific is a more recent addition to its geographic focus.
The Asia Pacific is “a region that is central to Mubadala’s strategic growth initiatives,” said Omar Eraiqat, deputy CEO of Diversified Investments at Mubadala. “The diverse and rapidly growing economies, as well as the increasing private equity deal volumes, are significantly driving demand in the Asia Pacific for customised credit solutions from non-traditional lenders.”
“India, in particular, stands out as a key market with significant opportunities in private credit and where Goldman Sachs has strong exposure and capabilities,” said Fabrizio Bocciardi, Head of Credit Investments at Mubadala.
As one of Abu Dhabi’s three main sovereign wealth funds, Mubadala has about $300 billion in assets under management (AUM), of which about 12% is invested in Asia. The firm is seeking to roughly double its exposure to Asia and move that number closer to 25% by as soon as 2030.
In pursuit of that target, Mubadala is betting on the big four in Asia, including India, China, Japan, and South Korea, Luca Molinari, Mubadala’s head of Asia for Direct Investments told DealStreetAsia in a recent interview.
Established in 1996, Goldman’s Private Credit team consists of 165 credit investment professionals, overseeing about $110 billion in assets across direct lending, mezzanine debt, hybrid capital, and asset-based lending strategies. The firm plans to double the size of its private credit business in the coming years.