In a significant development, Goldman Sachs and Abu Dhabi's sovereign wealth fund, Mubadala, have entered into a formidable $1 billion partnership, aimed at co-investing in private credit ventures across the dynamic Asia-Pacific region. With a specific focus on India, this collaboration is set to be managed by Goldman Sachs Alternatives and will operate as a separately managed account, deploying long-term capital into what the institutions term as "high-quality companies" situated across diverse Asia-Pacific markets.
The strategic alignment between Goldman Sachs and Mubadala comes on the heels of Goldman Sachs' 2023 expansion into the Middle East, marked by the establishment of its office in Abu Dhabi Global Market. This move is not only a testament to the financial giant's commitment to extending its global reach but also aligns with the broader trend of Gulf states, including the UAE, deepening their economic engagements in India.
India, positioned as the fastest-growing G20 economy for the 2023-24 fiscal year, holds a central role in this collaboration. The UAE, in October 2023, declared its intention to invest a substantial $75 billion in India, underlining the country's increasing economic importance. The strategic partnership between Goldman Sachs and Mubadala aims to tap into this growth potential, especially in the private credit landscape.
Fabrizio Bocciardi, Mubadala’s Head of Credit Investments, emphasized the significance of India in this collaboration, citing substantial opportunities in private credit and underscoring Goldman Sachs' established exposure and capabilities in the country. Greg Olafson, Global Head of Private Credit at Goldman Sachs Alternatives, sees the Asia-Pacific region as entering the "early stages of a defining era for private credit," citing strong economic growth and conducive conditions for private lenders.
This collaboration not only allows Goldman Sachs to bolster its existing investment focus in the Asia-Pacific but also serves Mubadala's strategic growth initiatives. Omar Eraiqat, Mubadala’s Deputy CEO of Diversified Investments, stated that the partnership aligns with their aspirations to grow private credit exposure in the Asia-Pacific region.
Both entities bring a global perspective and manage significant portfolios, making this partnership a strategic move towards capitalizing on the vast opportunities presented by the Asia-Pacific's economic landscape. As the deal unfolds, it will undoubtedly contribute to shaping the private credit narrative in the region and foster economic development there.
3 comments:
How might the $1 billion partnership between Goldman Sachs and Mubadala impact the broader financial ecosystem in the Asia-Pacific region beyond the private credit sector?
Was this a one-off investment or will they keep funding this venture in the future?
It will be interesting to see how the money will be used and how it will develop the Asia-Pacific economy.
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