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SC Lowy targets regional deals from Abu Dhabi office

ADGM said assets under management grew by 35%, with 102 asset managers managing 141 funds in 2023 ADGM
ADGM said assets under management grew by 35%, with 102 asset managers managing 141 funds in 2023

Hong Kong-headquartered SC Lowy, which invests in high yield and distressed credits, plans to open an office in Abu Dhabi amid growing opportunities in the Middle East region, its new regional head said.

“We are in the final stages, hopefully, of getting the final sign off from the regulatory bodies to open an office in Abu Dhabi Global Market (ADGM),” Berkay Oncel told Reuters in an interview, referring to the emirate’s financial centre.

He added the firm decided to go with Abu Dhabi, although it was also considering Dubai’s financial centre, because of the UAE capital’s focus on alternative credit markets.

ADGM issued a regulatory framework to allow private credit funds earlier this month.

SC Lowy is also exploring setting up a private credit fund dedicated to the Middle East, North Africa and Turkey, with a possible target size of between $200 million and $500 million, Oncel said. He added talks were at an early stage.

SC Lowy will initially have three or four staff in Abu Dhabi, but this could grow to more than 10 if the fund kicks off.

The company has already invested nearly $500 million in the region in the past decade and sees the biggest opportunities in the UAE, Saudi Arabia and Turkey.

In January, US hedge fund Davidson Kempner said funds it advises bought a $1.14 billion portfolio of non-performing loans from Abu Dhabi Commercial Bank.

“We are aware of at least four, five similar kind of portfolios being discussed in the market right now,” Oncel said.

In Saudi Arabia, Oncel identified the need for financing among mid-cap companies as a key opportunity, since local banks lend more actively to government-led mega-projects.

In Turkey, there are direct lending opportunities in exporting companies that cannot easily access dollar financing from local banks, Oncel said.