Barings, Mubadala join forces for $3.5bn financing platform

The partnership, which will target European mid-market businesses, follows the launch earlier this year of an Apollo/Mubadala tie-up aimed at the larger deal space.

Mubadala, the Abu Dhabi-based sovereign wealth fund, has announced its second strategic private credit partnership in the past few months.

This time, it has joined with Barings, the US-based global financial services firm, to launch Barings Mubadala Enterprise, an evergreen origination platform to provide financing solutions for European mid-market businesses.

BME and capital partners will aim to provide $3.5 billion in financing over the next 18 months to meet what it sees as growing demand for flexible capital solutions in Europe. The platform is anchored by Mubadala, which will invest alongside capital from Barings and MassMutual, the international investment management firm which owns Barings.

The BME platform’s main geographic focus will be the UK, France, Benelux and the Nordics.

Tom Finke, Barings chairman and chief executive officer, said: “We are looking to take advantage of middle-market direct lending opportunities, focusing on senior secured loans as borrowers shift focus from traditional bank financing to institutional capital providers to fund acquisitions and growth projects.”

Earlier in the summer, Mubadala announced it was launching a new $12 billion platform with US-based alternative assets giant Apollo Global Management to target what John Zito, Apollo’s deputy chief investment officer of credit, described as “the white space between the mid-market and the general corporate market”.

The interest of sovereign wealth funds in private debt appears to extend beyond Mubadala. Last week, the Qatar Investment Authority announced it was entering a “multi-billion” strategic direct lending partnership with Credit Suisse Asset Management to provide secured first- and second-lien loans to upper mid-market and larger companies in the US and Europe.