Private Credit Gains Momentum in UAE, Eyes Expansion Across GCC

UAE, 11 March, 2025 : The private credit market is gaining momentum in the GCC, with asset managers increasingly focusing on the region due to its underbanked SMEs and attractive returns. Industry experts see private credit as a natural evolution outside the U.S., where the market has already reached $1.5 trillion.

More private credit-focused asset managers are setting up in the UAE, with local investors attracted by mid-teen returns. U.S.-based firms like Nuveen and Golub Capital opened offices in Abu Dhabi last year. Fortress Investment Group, in partnership with Mubadala, also expanded its presence after acquiring a majority stake from SoftBank in May 2024.

Andy Frank, Global Head of Private Credit Origination at Fortress, emphasized the importance of regulation and bankruptcy laws for sector growth. “We have raised significant capital from the region, but deployment within the GCC is the next step,” he said.

Transparency and regulatory reforms, including corporate tax implementation, are expected to bolster private credit adoption. Asset-based credit could be an early mover, driven by economic diversification efforts, population growth, and government support for SMEs.

Despite private credit’s rise, banks continue to dominate lending in the GCC. However, Moody’s Managing Director Antonello Aquino noted that sovereign wealth funds are increasingly investing in private credit, both regionally and internationally. Foreign players are also setting up investment vehicles in the region to tap into strong funding needs driven by economic transformation.

Dubai-based Kingsbury & Partners, launched in October 2024, sees transparency as key to private credit expansion. Other firms, including Polen Capital and Janus Henderson, are making inroads through acquisitions and regional office openings. Polen Capital’s Middle East business head, Omar Sultani, highlighted growing competition in the U.S. and signaled interest in deploying capital within the GCC.

As the private credit sector matures, industry leaders expect increased local deployment, further integrating the region into the global alternative investment landscape.