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It’s a big news day for Abu Dhabi sovereign wealth fund Mubadala, which is reported to be planning to tap Islamic debt markets after making another investment in an international fund.
#1- Mubadala mulls maiden sukuk issuance: Abu Dhabi sovereign wealth fund Mubadala is reportedly planning to raise USD 1 bn in its first USD-denominated sukuk issuance as soon as this month, Bloomberg reports, citing people familiar with the matter.
Mubadala is looking to ride the sukuk wave: The wealth fund is looking to issue the sukuk to “take advantage of increased investor demand” for the Islamic debt sale, following the steps of Saudi sovereign wealth fund Public Investment Fund (PIF), which raised USD 2 bn in a sukuk offering last month. PIF also raised USD 3.5 bn last October in a sukuk offering that was more than 7x oversubscribed.
Demand for Islamic debt has increased on the back of high oil prices that improved Islamic banks and asset managers’ liquidity positions, the primary buyers of Shariah-compliant bonds.
ADVISORS- Mubadala has reportedly appointed our friends at HSBC alongside Abu Dhabi Commercial Bank (ADCB) and First Abu Dhabi Bank (FAB) as global coordinators for the Shariah-compliant debt offering.
#2- US global management firm Apollo Management Global has launched a new private credit fund with seed investments from Mubadala and “other institutional investors,” Bloomberg reports. Mubadala and an Apollo affiliate have pooled over USD 290 mn into the new fund — Middle Market Apollo Institutional Private Lending — which has north of USD 790 mn in total assets. The fund has locked down a total of USD 450 mn in seed commitments as of 15 March.
More on Middle Market Apollo: The fund, structured as a business development company, plans to invest up to 70-80% in loans to US middle market companies with EBITDA below USD 75 mn.
Structure and governance: The fund's provision mandates a doubling of investment commitments to USD 900 mn within five years, or cash will be returned to investors. It imposes a 1% management fee and a 12.5% incentive fee after a 6% hurdle rate is met. The new fund will waive fees for the first year and halve them in the following year for Mubadala and other investors.
Mubadala also appointed head of credit investments Fabrizio Bocciardi (LinkedIn) to the fund’s board, while Howard Widra (LinkedIn) serves as chair and holds key roles within Apollo.
Apollo and Mubadala go way back: This fund builds on a 2020 partnership between Apollo and Mubadala. The two entities have jointly pursued various ventures, including a USD 2.5 bn private credit platform introduced last year, according to Bloomberg.
