Blackrock Inc. and Emirates NBD, a top bank based in Dubai, are developing a new platform that will make it easier for investors in the Middle East to access growing private markets.
The product will give Emirates NBD’s high-net-worth clients access to private loans and other assets. It will be built on BlackRock’s Alternative Investments platform, which manages more than $450 billion in assets. It is also supported by over 1,000 personnel in more than 50 countries.
On the other hand, Emirates NBD is one of the biggest banks in the MENAT (Middle East, North Africa, and Turkey) area. It has offices in 13 countries and more than 9 million registered customers. As of December 31, 2024, its total assets were $271 billion.
Marwan Hadi, Group Head of Retail Banking and Wealth Management at Emirates NBD, said, “Innovation is a cornerstone at Emirates NBD, and we are pleased to partner with BlackRock to offer access to best-in-class, products in alternative markets through a dedicated platform while supporting the growing needs of investors in the region.”
He also said that the bank was fully committed to advancing investing in the UAE and the rest of the area through its services.
BlackRock’s focus on private markets in the Arabic world
Private markets, which used to be open to only institutional buyers in the region, are now the fastest-growing part of asset management. By the end of the decade, alternative assets are expected to be worth $30 trillion.
Emirates NBD Asset Management and BlackRock will launch the first evergreen products for the UAE wealth market, specifically designed to help with income and growth plans.
Along with these plans, BlackRock will use its open architecture approach to help Emirates NBD Asset Management with its plans to give more private market services by adding marketing, education, training, and technology.
Why the Middle East? There are many international players in the Middle East private credit market because of the demand, making it a ready market
Rachel Lord, Head of International at BlackRock, said, “We are delighted to partner with Emirates NBD as they build out their private markets platform. Spurred by investor sentiment and facilitated by product innovation, technology, and regulatory advancements, wealth allocations to private markets are predicted to increase materially over the next five years.”
She added that the combination of Emirates NBD’s distribution skills and reach across the area with BlackRock’s knowledge and leadership in private markets around the world will be very appealing to investors in the Middle East.
The financial placing for private markets
Globally, banks lend about 22% of their total loans to small and medium-sized businesses. Gulf Cooperation Council (GCC) banks give less than 2% of their loans to small and medium-sized businesses, while MENA banks give less than 10%.
While getting personal guarantees for government-backed contracts, well-known entities, and big family groups is easier, local credit funds have noticed that banks are still mainly interested in working with smaller businesses. This is where the gap is.
One reason for this focus is that big government building projects in places like Saudi Arabia and the UAE need a lot of money. This makes banks less liquid. Therefore, access to capital for ambitious entrepreneurs and businesses that are growing is still a big problem in the area.
Borrowers who don’t have bank accounts benefit from the ease of access, privacy, and flexibility of private credit. It also usually has better capital terms than standard financing for new businesses.
In fact, many business owners like private credit because it lets them keep more equity in their businesses and is an important step in the transition from startup funding to standard bank financing.
For these reasons, global and foreign companies are quickly entering the market. In 2022, Following Chimera’s $2 billion private credit joint venture with Alpha Wave, Lunate was created as an alternative asset manager with $110 billion in assets.
According to Bloomberg, Lunate is apparently interested in buying a minority stake in global private credit leader HPS Partners.
Mubadala is currently the biggest. After forming at least seven partnerships with companies like Apollo, Ares, Blackstone, and Goldman Sachs, it has promised over $5 billion in private loan investments in the UAE and other countries.
New companies are entering the asset class every month, including Rasmalah, Ruya Partners, Shorooq Partners, Jada Fund of the PIF, and Qatar Investment Authority (QIA). Now, with the new partnership, there is a new giant in the market.
