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Dubai-based Magellan Capital launched a new open-ended credit fund targeting SME and individual borrower financing across the GCC and Europe, with USD 50 mn in seed capital and an AUM target north of USD 250 mn, according to a press release (pdf). The Magellan Asset Backed Opportunities Fund is incorporated in the DIFC and is the first institutional open-ended vehicle of its kind in the Gulf, according to the firm.
The structure offers investors something conventional closed-ended private credit funds don't: a preferred redemption schedule with a liquidity pathway. It can also invest in shariah-compliant facilities, opening it up to the full GCC investor base, while targeting double-digit returns.
Why it matters: Asset-backed lending has been a pillar of credit markets in Europe and North America for decades, but the Gulf has never had a local institutional equivalent, leaving SMEs largely underserved, the firm says.
The proof of concept started with Beehive, one of the GCC’s leading SME lending platforms, which Magellan used as an initial investment to validate the model before building a fund around it. Magellan Capital, as part of a consortium with Goldman Sachs, participated in a mezzanine AED 500 mn facility for Beehive last year.
BACKGROUND- This is the second significant product launch from Magellan this year. In February, the firm scaled up its multi-strategy hedge fund to USD 975 mn — up from a USD 700 mn soft launch in August 2024 — marking the first time the firm brought in third-party capital alongside the El Ali family fortune that seeded it. That fund taps emerging market credit, long-short investing, and long-only equities.
What’s next: Magellan says it’s in advanced discussions with counterparts across multiple segments and geographies, and we’ll be keeping an eye out for fundraising milestones as the fund works toward its USD 250 mn AUM target.
