New Debt Financing Partnership: AlpInvest and Mubadala Join Forces

AlpInvest Partners and Abu Dhabi's Mubadala Investment Company have formed a partnership to offer debt financing to private equity firms, enabling them to borrow against their funds' assets. This move aims to help these firms manage financial challenges amid high interest rates and a struggling deal environment.

AlpInvest Partners, the secondary investments wing of the illustrious Carlyle Group, has announced a strategic partnership with Abu Dhabi's Mubadala Investment Company. This collaboration is poised to deliver debt financing to private equity firms, a move anticipated to fuel growth in a currently challenging financial landscape.

The partnership focuses on providing senior fund financing, also known as net asset value (NAV) financing. This strategy allows private equity firms to draw loans against their funds' assets, a critical lifeline in today's high-interest environment that has made leveraged buyouts more arduous and decreased the ability of buyout firms to return capital to investors.

Michael Hacker, AlpInvest's global head of portfolio finance, emphasized the importance of these loans as the private equity market stabilizes. Already, the partnership has completed its first investment, with Mubadala expanding its credit strategies to include senior loans against fund portfolios, complementing its existing initiatives in direct lending and technology financing.

(With inputs from agencies.)