Mubadala and Goldman Sachs to Explore Private Credit Opportunities in Asia Pacific

In order to capitalise on the fast-growing opportunities in private credit opportunities, Goldman Sachs and Abu Dhabi fund Mubadala Investment Company have signed a $1 billion separately managed account (Partnership) in which Mubadala and Goldman Sachs Alternatives will co-invest in the sector private credit opportunities throughout the Asia Pacific region.

The region’s private credit market has grown 3.5 times in the 10 years to 2022 to $81.3 billion and is expected to top $100 billion by 2027, according to data provider Preqin. However, Asia-Pacific accounts for only about 5.5 per cent of the US$1.5 trillion private credit market globally, Preqin said.

The partnership will be managed by Private Credit at Goldman Sachs Alternatives, with a dedicated on-the-ground team across multiple Asia Pacific markets.

The global Private Credit team consists of 165 seasoned credit investment professionals overseeing more than $110 billion in Assets Under Management (AUM) and drawing on the network, expertise and capabilities of Goldman Sachs to source and underwrite global lending opportunities.

Since 1998, Goldman Sachs has invested across multiple Asia Pacific markets, including Australia and New Zealand, India, Southeast Asia, China, Korea and Japan.

This mandate will enable both firms to continue scaling their investment activity in the large and growing Asia Pacific credit market. The partnership will aim to deploy $1 billion of long-term capital, offering customised private credit solutions to high-quality companies and sponsors throughout the Asia Pacific region. The Partnership will invest across the private credit spectrum and is expected to invest across multiple Asia Pacific markets, focusing on India.

In 2023, Goldman Sachs announced that it is expanding its footprint in the Middle East and North Africa (MENA) region by opening a new office in Abu Dhabi Global Market (ADGM), the international financial centre of the UAE’s capital city.

The new office will complement the firm’s growing regional presence, allowing it to deepen relationships with clients and meet them where they are. Establishing a new office in ADGM is part of the firm’s long-term strategy to continue growing its footprint and client offering in the region.

Helps in Further Expansion

Marc Nachmann, Global Head of Asset and Wealth Management at Goldman Sachs, said that the partnership will bolster the expansion of their Asia Credit platform and investment in new opportunities across the Asia Pacific region where bespoke credit solutions are needed.

“We continue to believe our rigorous underwriting and dedicated on-the-ground sourcing provide us with differentiated investment opportunities. We look forward to working closely with Mubadala and growing this Partnership between our firms,” Nachmann said.

Greg Olafson, Global Head of Private Credit at Goldman Sachs Alternatives, said that the opportunity in private credit in Asia Pacific has been growing.

“With strong economic growth in the region and favourable conditions for private lenders to support the growth of leading companies by providing flexible, long-term capital, we believe we are at the early stages of a defining era for private credit in Asia Pacific. Through this Partnership with Mubadala, we look forward to expanding our long-established investment focus on the region,” Olafson added.

Omar Eraiqat, Deputy CEO of Diversified Investments at Mubadala, said that the diverse and rapidly growing economies, as well as the increasing private equity deal volumes, were significantly driving demand in Asia Pacific for customised credit solutions from non-traditional lenders. This partnership with Goldman Sachs compliments Mubadala’s aspirations to grow our private credit exposure in APAC, a region that is central to Mubadala’s strategic growth initiatives, he said.