Mubadala Investment entered a USD 500 mn real estate debt partnership with MassMutual’s investment management arm Barings, as the sovereign wealth fund looks to capitalize on a funding gap for the sector, state news agency Wam reports. The JV aims to deploy capital into senior and subordinated real estate loans across the US, Europe, and Asia-Pacific.

Our take

Mubadala is targeting the high-yield and riskier segment of the capital stack to capitalize on a global real estate credit crunch, as commercial banks in the US and Europe retreat due to high interest rates and tightening capital requirements. This positions the sovereign player to fill a funding gap for property owners facing debt maturities, securing fixed and double-digit returns.

Background

Mubadala has been ramping up its exposure to both real estate and private credit. Mubadala Capital launched a real estate and infrastructure investment management platform alongside Aldar and partnered with Cain International to deploy bns in luxury real estate. It also acquired a USD 600 mn Apollo Global-managed direct lending portfolio, backed Janus Henderson’s MENA private credit fund, and committed USD 1 bn to its partnership with Fortress Investment.

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