Abu Dhabi's Invest AD launches private credit investment fund

The SCA-regulated vehicle will broaden investment options for qualified investors in the UAE

Blackstone Group's headquarters in New York. Blackstone Credit is one of the world’s largest credit managers. Reuters

Abu Dhabi Investment Company, better known as Invest AD, a wholly owned subsidiary of Mubadala Investment Company, has launched a vehicle that will allow UAE investors to invest in private credit.

The Invest AD Blackstone Private Debt Fund, a UAE Securities and Commodities Authority-regulated fund, will offer “local feeder access to Blackstone’s US and European private credit strategies”, Invest AD said on Monday.

It is the first global private credit fund of funds vehicle for professional investors in the UAE, which broadens access to an asset class that has “historically only been primarily accessible to institutional investors”, the company said.

“This strategic partnership with Blackstone will enable us to provide our clients with access to semi-liquid private credit platforms,” said Mohammad Saleemi, chief executive of Invest AD.

“Private credit has the potential to generate strong returns as part of investors’ portfolios, and we look forward to partnering with the leading player in this space to broaden access to this asset class.”

Demand for private credit – lending to companies by financial institutions other than banks – has grown significantly in recent years.

Unlike most bank loans, private credit solutions can be tailored to meet borrowers’ needs in terms of size, type or timing of transactions.

The size of the private credit market at the start of 2023 was about $1.4 trillion, compared to $875 billion in 2020, and is estimated to grow to $2.3 trillion by 2027, according to a Morgan Stanley report.

Blackstone Credit is one of the world’s largest credit managers and currently makes up more than half of Blackstone's $295 billion credit and insurance platform.

It invests primarily in the senior secured debt of large private US and European companies.

The partnership with Invest AD will “expand access to institutional quality private credit solutions for their clients, as we have done in markets around the world”, said Rashmi Madan, head of Europe Middle East and Africa at Blackstone Private Wealth Solutions.

“We are seeing strong demand for private credit today [and] we believe the current double-digit yields we’re seeing in the asset class present a compelling opportunity for returns similar to that of historical equity performance, while taking senior secured risk.”