Goldman Sachs and Abu Dhabi’s Mubadala sign US$1 billion private credit deal with eye on Asia-Pacific
- The US investment bank and the Abu Dhabi sovereign wealth fund will extend long-term capital to ‘high-quality companies and sponsors’ across Asia-Pacific
- The private credit market in Asia-Pacific is expected to reach US$100 billion by 2027 from US$81.3 billion in 2022, according to data provider Preqin
The two firms signed an agreement on Monday, which will see them lend long-term capital to “high-quality companies and sponsors” across multiple Asia-Pacific markets with a focus on India, according to a statement from the US investment bank.
“The opportunity in private credit in Asia-Pacific is expansive,” said Greg Olafson, global head of private credit at Goldman Sachs Alternatives, part of the bank’s asset management arm. “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.”
The region’s private credit market has grown 3.5 times in the 10 years to 2022 to US$81.3 billion and is expected to top US$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.
Investors are flocking to private credit eyeing higher returns at a time when equity and bond markets remain muted because of the high interest rate environment. Meanwhile, companies are increasingly turning to this fundraising channel amid scaled-back bank lending and the need for flexible financing solutions.