Abu Dhabi wealth fund puts $450 mln more into Australian private credit fund

Qualitas

22/08/2023 09:18

By Lewis Jackson
       SYDNEY, Aug 22 (Reuters) - Abu Dhabi's sovereign wealth
fund, one of the world's largest, will double its investment in
an Australian real estate private credit vehicle, the fund's
manager said on Tuesday, as traditional lenders grow wary about
the sector.
    Qualitas  QAL.AX  said an Abu Dhabi Investment Authority
(ADIA)-owned vehicle will invest A$700 million ($449 million)
into one of its Australian commercial real estate private credit
fund. 
    The move doubles ADIA's investment to A$1.4 billion after a
first round last August.
   Australian-listed Qualitas invests in real estate private
credit and equity and has A$7.5 billion under management, the
vast majority run on behalf of institutional investors.
    Co-founder Andrew Schwartz said in a statement Qualitas had
A$2.3 billion ready to invest "as traditional financiers appear
to continue to retreat, particularly in the residential and
development sectors."
    Major banks and public debt markets are growing wary about a
real estate sector where higher rates are crunching property
values just as home working and e-commerce challenge the
long-term viability of some offices and malls.
    The head of Dexus  DXS.AX , one of Australia's largest
office landlords said last week public bond markets were
"effectively closed" for real estate companies while banks were
becoming very particular about lending. Dexus remained
well-supported by its banks, he added.
    Tuesday's deal also opens the door to ADIA taking an equity
stake in Qualitas. As part of the initial A$700 million
investment last August, ADIA received share options equivalent
to 9.99% of Qualitas' issued equity. 
    ADIA is now eligible to exercise roughly two thirds of those
options at a strike price of A$2.50. Qualitas shares closed on
Tuesday at A$2.48.
    The remaining options will become available should ADIA
invest a further A$300 million.
    Qualitas declined to comment when asked if ADIA had
indicated it planned to exercise the options. ADIA declined to
comment.
    

($1 = 1.5598 Australian dollars)

 (Reporting by Lewis Jackson; Editing by Sharon Singleton)
 ((lewis.jackson@thomsonreuters.com; Reuters Messaging:
@lewjackk))