Alpha Dhabi Doubles Stake and Investment in Mubadala Joint Venture to $1 Billion

Alpha Dhabi has increased its shareholding and capital commitment in its private credit joint venture with the emirate’s sovereign fund Mubadala Investment Company in an effort to diversify its investment portfolio.

Under the revised agreement, the investment holding conglomerate has raised its capital commitment in Micad Credit JV to $1 billion, according to a statement filed with the Abu Dhabi Securities Exchange, where its shares are listed. The company also expanded its stake in Micad from 20 per cent to 40 per cent. The joint venture currently manages approximately $1.7 billion in assets across 45 portfolio companies.

Additionally, the partners agreed to broaden the investment horizon of Micad, which is managed by alternative asset manager Mubadala Capital. The expanded scope now includes additional private credit strategies through Mubadala Capital's long-standing relationships, complementing its existing direct lending activities in the US and Europe.

“This expanded partnership with Mubadala Capital reflects our conviction in private credit as a strategic pillar of Alpha Dhabi's investment portfolio,” stated Hamad Al Ameri, managing director and group chief executive of Alpha Dhabi. “Doubling our commitment and broadening our mandate is a deliberate step – one that positions us to access a wider universe of high-quality global opportunities.”

Demand for private credit, defined as institutional lending outside of traditional banking channels, has experienced significant growth since the 2008-09 financial crisis. Unlike standard bank loans, private credit providers offer tailored financing solutions to meet specific borrower requirements regarding transaction size, type, and timing. This alternative funding source has gained considerable popularity among corporate borrowers, with Morgan Stanley projecting the sector could reach a $5 trillion market valuation by 2029.

Despite its rapid expansion, private credit has faced increased scrutiny over recent quarters following several high-profile US bankruptcies, which prompted questions regarding industry underwriting standards. Views remain split on whether private lending introduces additional systemic complexities to the financial system and the wider economy.

Since its launch in 2023, Micad has maintained its focus on identifying and investing in attractive credit opportunities across sectors and geographies that deliver strong risk-adjusted returns, Alpha Dhabi noted.

“As our credit business continues to grow, we remain focused on expanding access to differentiated private credit opportunities through our investment capabilities and long-term global relationships in the sector,” said Omar Eraiqat, president and chief investment officer for credit and solutions at Mubadala Capital.