News Summary
UBS Group AG and General Atlantic have formed a strategic partnership to enhance their capabilities in the private credit market. This collaboration will focus on senior secured direct lending to North American and Western European companies. With UBS’s investment banking expertise and General Atlantic’s private credit knowledge, they aim to create tailored credit solutions. The partnership aligns with the growing demand for private credit, valued at approximately $1.7 trillion, as firms face tighter lending regulations from traditional banks.
New York City – UBS Group AG and General Atlantic have entered into a strategic partnership aimed at strengthening their positions in the expanding private credit market. This collaboration seeks to enhance private credit offerings and provide clients with a broader spectrum of direct lending and credit products.
The alliance emphasizes senior secured direct lending to companies based in North America and Western Europe. UBS will leverage its extensive advisory and investment banking capabilities, while General Atlantic will contribute its specialized knowledge in private credit investing. This joint effort is designed to create comprehensive and innovative credit solutions tailored to client needs.
Bill Ford, CEO of General Atlantic, highlighted the complementary corporate cultures shared by both companies and expressed a mutual goal of scaling a leading private credit platform. Meanwhile, Sergio P. Ermotti, CEO of UBS, noted the opportunity for innovation in private credit solutions stemming from their merged strengths.
General Atlantic Credit (GA Credit) will govern investment activities and oversee a dedicated private credit team composed of professionals from both GA Credit and UBS Asset Management’s Credit Investments Group. This setup is expected to significantly enhance UBS’s Investment Bank private-market capabilities, particularly across the Americas.
The partnership marks a noteworthy development in the rapidly growing private credit sector, which is currently valued at approximately $1.7 trillion. UBS, which managed $6.2 trillion of invested assets as of March 31, adds considerable weight to the collaboration. General Atlantic operates with about $108 billion in assets under management as of the same date, enhancing the partnership’s financial strength.
Although the firms have chosen not to disclose specific capital commitments regarding this alliance, the partnership arrives at a time when demand for private credit is escalating. This increase is primarily driven by a rising need for loans from lightly-regulated lenders, especially as traditional banks face stricter lending constraints.
The private credit landscape has been experiencing a flurry of partnerships, mergers, and acquisitions, reflecting its growing prominence in the financial industry. Recent alliances include DWS Group’s partnership with Deutsche Bank and HSBC’s intentions to venture into the private credit space.
This strategic partnership is expected to position both UBS and General Atlantic advantageously as private credit continues to gain traction and importance in investment strategies. Legal counsel for General Atlantic was provided by Paul, Weiss, Rifkind, Wharton & Garrison LLP, while UBS received guidance from Latham & Watkins LLP.
As the financial sector evolves, the collaboration between UBS and General Atlantic illustrates a forward-thinking approach to meet the demands of a dynamic market. With their combined expertise and resources, both firms aim to establish a robust presence in the private credit arena, ultimately benefiting clients with more diverse borrowing options.
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Additional Resources
- Reuters
- Wikipedia: Private Credit
- Investing.com
- Google Search: UBS General Atlantic private credit
- Bloomberg
- Encyclopedia Britannica: Private Credit
