Mubadala and Goldman Sachs to put $1bn into Asia-Pacific

• Customised credit demand rises
• Private equity market at $2.9trn
• Particular focus on India

Mubadala and Goldman Sachs have signed a $1 billion agreement to invest in private credit deals in the Asia-Pacific region.

The partnership between Abu Dhabi’s sovereign wealth fund and Goldman Sachs Alternatives will put private credit into “high-quality companies and sponsors” throughout the region with a particular focus on India, they said in a joint statement.

“The diverse and rapidly growing economies, as well as the increasing private equity deal volumes, are significantly driving demand in Asia-Pacific for customised credit solutions from non-traditional lenders,” said Omar Eraiqat, deputy CEO of diversified investments at Mubadala.

• Mubadala to shift investment focus to Asia says CEO

• Mubadala co-launches $600m Japanese property fund 

• Mubadala co-leads $315m fundraising for Chinese firm

The Asia-Pacific private equity market is almost double the size of the European market. It had approximately $2.9 trillion in assets under management in 2022.

Deal value tripled from $63 billion in 2012 to $198 billion in 2022, said US investment firm Kohlberg Kravis Roberts.

In India, private credit deal flow in 2023 passed 2022 levels. Last year there were 108 deals valued at $7.8 billion, up from 77 deals worth $5.3 billion, according to a report from EY. 

The increase was attributed to stable interest rates and increased activity in real estate private credit deals.

Julien Lafargue, chief market strategist at Barclays Private Bank, said: “We’ve seen a lot of inflows going into the Indian market because the economy is doing well, there are ongoing reforms and because people, I think, want to maintain the Asian exposure.”

In December, Mubadala’s CEO, Khaldoon Al Mubarak, said the fund was planning to shift its investment focus towards Asia.

“It’s in big economies with big populations that are growing,” he said, talking about the potential of India and South-East Asia.

Beijing office

Mubadala, which manages more than $240 billion in assets, has invested $4 billion in India. Investments include telecom and retail businesses owned by the Indian billionaire Mukesh Ambani and Tata Power’s renewable energy unit.

The sovereign wealth fund opened an office in Beijing in September. In October it signed a partnership with Kohlberg Kravis Roberts to invest $1 billion in private credit deals in Asia.

Goldman Sachs Alternatives, which has a team of 165 investment professionals in its private credit team overseeing more than $110 billion in assets under management, will manage the latest Mubadala partnership.

Goldman Sachs opened an office in Abu Dhabi Global Market last year.