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.

Emaar lifts #Dubai to over decade-high; most Gulf shares slip | Reuters

Emaar lifts Dubai to over decade-high; most Gulf shares slip | Reuters

Dubai's benchmark share index surged on Tuesday to its highest level in more than a decade, while most other markets in the Gulf tracked global equities lower ahead of the U.S. Federal Reserve's monetary policy meeting later this week.

Dubai's benchmark stock index (.DFMGI), opens new tab extended its rally to a second straight session, rising 0.6% to 5,080, its highest in 10 years and three months.

Shares of Emaar Properties (EMAR.DU), opens new tab were up for a second day, rising 15% to their highest in nearly 19 years, after the developer said on Monday it had planned to declare dividends at 100% of share capital for 2024 and the next few years, amounting to 8.80 billion dirhams ($2.4 billion).

The Qatari benchmark index (.QSI), opens new tab snapped its six-session winning streak and slipped 1.1%, with almost all stocks in the red. Industries Qatar (IQCD.QA), opens new tab dropped 2.7% and Qatar Islamic Bank (QISB.QA), opens new tab slid 1.1%.

Saudi Arabia's benchmark stock index (.TASI), opens new tab slipped 1.2%, with all sectors in the negative territory. Oil major Saudi Aramco (2222.SE), opens new tab dropped 1.2% and Almarai (2280.SE), opens new tab lost 4.3%.

Savola Group (2050.SE), opens new tab soared 10% after the Kingdom's largest foods producer said on Sunday its shareholders approved the board's proposal to reduce capital and compensate by paying 8.34 billion riyals ($2.22 billion) in the form of Almarai shares.

The Abu Dhabi benchmark index (.FTFADGI), opens new tab was down 0.2%, pressured by losses in most sectors. Aldar Properties (ALDAR.AD), opens new tab lost 1.1% while ADNOC Gas (ADNOCGAS.AD), opens new tab slid 1.2% after the natural gas producer appointed a new CEO.

Among other fallers, ADNOC Drilling (ADNOCDRILL.AD), opens new tab was down 0.5%. The drilling unit of state-owned energy giant ADNOC, said it has formed an 'unconventional' energy venture with SLB, Patterson-UTI.

Meanwhile, the U.S. central bank is expected to cut rates by a quarter of a percentage point at its Dec. 17-18 meeting, which will also provide an updated look at how much further Fed officials think they will reduce rates in 2025 and perhaps into 2026.

The Fed's decisions impact monetary policy in the Gulf, where most currencies, including the riyals, are pegged to the U.S. dollar.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab was down 0.6%, weighed down by a 2% drop in Commercial International Bank (COMI.CA), opens new tab and a 3.6% fall in Abu Qir Fertilizers (ABUK.CA), opens new tab.