Mubadala transfers $25B private credit portfolio to capital arm

Abu Dhabi’s Mubadala sovereign wealth fund is handing management of a $25 billion private credit portfolio to its asset management arm, Mubadala Capital, in a move that will let the business raise money from outside investors for the first time.

Mubadala is also committing another $4.65 billion to help the platform grow, betting that more pension funds, insurers and other institutional investors will seek private lenders as traditional banks pull back from corporate lending, Bloomberg reports.

The strategy reflects the rapid growth of private credit, in which investment firms make loans directly to companies rather than relying on banks. Mubadala Capital CEO Hani Barhoush told the news agency that the move opens the firm’s lending platform to outside investors while the sovereign fund retains ownership of the $25 billion portfolio.

Private credit has grown into a $1.8 trillion market, attracting firms including Blackstone, Apollo Global Management, Ares Management and Brookfield Asset Management.

As part of the overhaul, Mubadala Group CEO Khaldoon Al Mubarak will become chairman of Mubadala Capital, which has grown from an in-house investment unit into one of the Middle East’s largest alternative asset managers.

The business, which invests in direct lending, infrastructure, real estate debt and other credit strategies, will be led by Omar Eraiqat as president and chief investment officer for Credit and Solutions, alongside Fabrizio Bocciardi as head of credit. More than 25 employees have transferred to Mubadala Capital as part of the restructuring.