BlackRock, Mubadala unwind partnership for Asia private credit: sources

[HONG KONG] BlackRock and Mubadala Investment have mutually agreed to unwind their Asian private credit partnership that focuses on investments in China and Indonesia due to challenges in sourcing deals, according to people familiar with the matter.

Under the partnership, which started in 2023, the Abu Dhabi state-owned investment firm was to match every US dollar that BlackRock agreed to put in, said the people, who requested not to be named because the information is private.

The world’s largest asset allocators are forging alliances with private credit funds to capitalise on the rapidly expanding US$1.7 trillion private credit market. Mubadala is one of the most active investors in the space, building a portfolio of 73.5 billion dirhams (S$25.5 billion), backed by collaborations with firms including Apollo Global Management, Carlyle Group, and KKR.

BlackRock did not respond to a request for comment. Mubadala declined to comment.

The partnership has deployed only a limited amount of capital. Originating deals in China is proving difficult given the mid-teens return profile it’s targeting, said the people.

The head of private credit in Indonesia, Christopher Ganis, left in the early days of the collaboration for sovereign wealth fund Indonesia Investment Authority. That’s made it difficult for deal origination in the country, the people added.

BlackRock’s head of Asia-Pacific private credit, Celia Yan, also left to join Apollo recently, just as the firm is finalising its integration with HPS Investment Partners.

BlackRock last year agreed to buy HPS in an all-stock deal valued at about US$12 billion. The transaction is expected to be completed in the middle of this year, pending regulatory approval. The combined platform will expand to a team of 22 private market investment professionals with senior investor additions in Singapore and Sydney, according to an internal memo. BLOOMBERG