Abu Dhabi’s US$1 trillion fund seeks more innovation in private credit

ABU Dhabi’s US$1 trillion sovereign investor called for more innovative products including exchange-traded funds in the private credit market, where it’s been ramping up bets in recent years. 

“There’s a lot of opportunities in that asset class,” Abu Dhabi Investment Authority executive director Dhaen Al Hameli said on a panel on Tuesday (Dec 10). “We want to see more innovation – we’re seeing a lot of private credit funds partnering with asset managers to create some kind of products with liquidity.”

As an example, he pointed to exchange-traded funds. “ETFs give you a sense of exposure to underlying illiquid nature of private credit, and that’s definitely exciting,” Al Hameli said at the Abu Dhabi Finance Week.

His comments come days after the first two ETFs to hold private credit loans began trading. The new fund launches followed a surprise filing from Apollo Global Management and State Street in September for an ETF that will include private credit investments originated by the former.

Adia, as the fund is known, is Abu Dhabi’s biggest state-backed investor and has helped drive the city’s push into the US$1.6 trillion private credit market. As part of broad changes to its strategy, the fund is now putting money more rapidly into the sector, Bloomberg News has reported.

Earlier this year, Adia boosted its exposure to real estate private credit fund Cheyne Capital, and it has also committed US$1 billion to a new vehicle set up by Barclays and AGL Credit Management. Abu Dhabi’s Mubadala Investment has also unveiled a string of deals in the sector. BLOOMBERG