Private Credit Has New Opportunities in the Gulf, Lawrence Golub Says - Bloomberg

Private Credit Has New Opportunities in the Gulf, Lawrence Golub Says - Bloomberg

New mid-sized businesses springing up in the Gulf will offer fresh lending opportunities to private credit firms in the region, the chief executive officer of Golub Capital said.

Initially, the opportunities for direct lending in the region are likely to be in the “hundreds of millions not billions of dollars,” Lawrence Golub, CEO of the eponymous private credit firm said in an interview. The Gulf has “a great many government-related companies and a great many large family enterprises, who don’t really have any need for direct lending capital,” he said.

Instead medium-sized businesses, which are really starting to grow in the United Arab Emirates and Saudi Arabia, are an area where the firm can expand into, Golub said.

Golub Capital has opened an office in Abu Dhabi, becoming the latest private credit firm to expand in the region where scores of asset managers and hedge funds have flocked in search of capital. Pemberton Asset Management, one of Europe’s largest private-credit investors, raised at least $1 billion along with Abu Dhabi Investment Authority in June to back private equity firms.

Institutions such as BlackRock Inc. and Blackstone Inc. have made the Middle East a hub for fundraising, targeting state-backed investors and massive family offices. But to date, international firms have done little by way of investing locally, despite the efforts of Gulf governments. To date, private credit dealflow in the region remains limited.

“We are studying, but not yet ready to take action on direct lending in the region. We’re not ready to launch it yet,” Golub said. “Now we are taking other actions to be more engaged in the communities here.”

The private credit player, with around $70 billion in loans outstanding, hired Naser Almutairi as managing director for the Gulf region and to lead its Abu Dhabi office.

The arrival of private credit is a logical next step for a region that’s already drawn hedge funds, crypto firms and Russian billionaires in search of deep-pocketed business partners.

Among the entrants this year, private credit lender Monroe Capital is opening an office in Abu Dhabi after hiring a head of Middle East distribution. Blue Owl and Hayfin Capital Management are also expanding in the region.