The influence of state-owned investors (SOIs) in private equity and credit markets is poised to grow significantly in 2025, reflecting a broader shift in global investment strategies. While not entirely new, this trend is being spearheaded by Abu Dhabi funds, according to research consultancy Global SWF.
Over the past four years, Abu Dhabi Investment Authority (ADIA) has acquired stakes in Corient, Fisher Investments (with Lunate), and Hargreaves Lansdown. ADQ has invested in Sagard and Plenary Group, while Mubadala has acquired stakes in Corient’s parent company CI Financial, as well as in Silver Lake, Fortress, and Silver Rock.
This strategy is likely to intensify as the lines between limited partnerships and general partnerships blur, enabling SOIs to deepen their influence and operational expertise within alternative asset classes, Global SWF said.
The private credit market, which has doubled to $1.7 trillion since 2018, is projected to reach nearly $3trn by 2030, fuelling investor appetite. As traditional banks retreat from lending due to regulatory pressures and economic uncertainty, private credit is filling the void.
Middle Eastern SWFs are at the forefront of this surge. Projections suggest SOIs could collectively manage $6trn in assets by 2025 and $7trn by 2030, driven by ambitious economic diversification plans in the Gulf.
ADIA has anchored several initiatives, including Pemberton’s $1 billion net asset value financing strategy. Mubadala established a $1bn partnership with Goldman Sachs to invest in private credit across Asia-Pacific and a $2.5bn platform with Apollo Global targeting middle-market companies in the US.
While higher interest rates and economic uncertainty pose risks to borrowers, they also present opportunities for investors to acquire distressed assets at discounted valuations.
Private credit’s inherent flexibility, tailored solutions, and resilience to market volatility make it an attractive asset class for institutional investors, according to Global SWF.
Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).
