Abu Dhabi's strategic investor Mubadala Investment Company and Ares Management Corporation have set up a joint venture with approximately $1 billion, to invest in global credit secondaries opportunities.

With this Ares, a global alternative investment manager, extends its credit and secondaries platforms, which respectively had approximately $214 billion and $22 billion of assets under management as of December 31, 2022.

"By leveraging Ares’ track record and Mubadala’s global footprint, the joint venture will benefit from access to a broader network, differentiated market intelligence, and new transaction opportunities," the companies said in a statement on Wednesday.

The joint venture, anchored by Mubadala, is anticipated to scale alongside the growing market opportunity.

Fabrizio Bocciardi, Head of Credit Investments at Mubadala said: “Private credit has become a relevant and important part of institutional portfolios which has led to the growth and development of the private credit secondaries industry. We believe that Ares is particularly well-positioned as a global leader to capitalize on the growing demand for diversified credit secondaries opportunities.”

Dave Schwartz will serve as Partner and Head of the Credit Secondaries strategy and a member of the Ares Secondaries Executive Committee.

“There has been a substantial increase in credit secondaries transaction volume resulting from the growth of the primary private credit market,” said Schwartz.

“Against this market backdrop, we see a meaningful supply-demand imbalance requiring dedicated capital to meet the liquidity needs of General and Limited Partners. We believe that our partnership with Mubadala combined with the scale, underwriting capabilities and experience of our private credit and secondaries businesses will allow us to take advantage of these attractive market dynamics as we seek to drive attractive risk-adjusted returns for our investors.”

(Reporting by Brinda Darasha; editing by Seban Scaria)