Abu Dhabi’s Mubadala partners with Ares on $1bn private credit fund
Abu Dhabi sovereign wealth fund Mubadala Investment Company has partnered with Ares Management and Aldar Properties on a $1bn (£800m) private credit fund.
The new fund will invest in property across the UK and mainland Europe over the next three to five years.
Mubadala will hold a 50 per cent stake in the venture, with 30 per cent held by Aldar, an Abu Dhabi-based property developer, and the remaining 20 per cent held by alternative investment manager Ares Management.
Read more: ‘Megatranche’ private credit loans on the rise
Additionally, Aldar will invest $100m into an existing European private real estate credit strategy launched by Mubadala and Ares in 2021.
“Private credit is an increasingly important element of real estate finance in mature markets,” said Talal Al Dhiyebi, group chief executive of Aldar Properties.
“With the rising prevalence of non-bank lending, as credit conditions tighten and stricter capital requirements are implemented, we see a substantial opportunity for Aldar as a strategic real estate investor.”
Read more: Private debt market to grow to $2.8trn as number of funds hits record high
Omar Eraiqaat, deputy chief executive of disruptive investments at Mubadala, added: “Mubadala has strong and strategic relationships with both Ares and Aldar, and this new platform leverages the collective strengths of each party to invest in the private real estate credit market in the United Kingdom and Europe. This collaborative approach reflects our shared commitment to identifying and capitalizing on unique investment opportunities that deliver sustainable, long-term returns.”
Ares will provide a dedicated investment team for the new fund, mandated to cover real estate debt deal origination, portfolio monitoring, and deal pipeline execution.
“The global opportunity for flexible private real estate lenders continues to grow as we see ongoing retrenchment of traditional sources of capital,” said Phil Moore, partner and head of European real estate debt in Ares Real Estate.
Read more: Investors favour private credit over other alternatives
“We remain focused on leveraging our cycle-tested team, global market perspective and disciplined approach to capitalize on our high conviction sectors, including the residential, mixed-use and adjacent spaces, all of which continue to benefit from attractive supply/demand dynamics. Our most recent investments reflect our ability to step into complex situations and provide flexibility up and down the risk/return spectrum at scale. We look forward to further pursuing attractive lending opportunities and executing on our debt investment strategy in Europe alongside Mubadala and Aldar.”
Sovereign wealth funds are increasingly tapping into the fast-growing private debt market. Last month, Saudi Arabia’s state-backed Jada Fund of Funds unveiled its first foray in the private credit space, with a $250m investment in private credit firm Ruya Partners.
