Mubadala Investment Co. has reaffirmed its confidence in private credit after building a $20bn portfolio and forming partnerships with Apollo, Carlyle, and KKR, saying the asset class remains resilient despite recent stress in parts of the lending market, according to Bloomberg sources.

Speaking at the Milken conference in Abu Dhabi, deputy group CEO Waleed Al Mokarrab Al Muhairi dismissed concerns about structural weaknesses. He said performance hinges on diversification and disciplined risk construction, not on whether the sector faces an impending downturn.

His remarks follow losses at several lenders, including JPMorgan Chase’s $170m hit on subprime auto lender Tricolor Holdings, which prompted Jamie Dimon to warn of more “cockroaches” potentially hidden in credit portfolios.

Despite this backdrop, Mubadala said private credit has been its top-performing asset class for the past three years. Al Muhairi noted that returns are cyclical but added he does not expect the market to collapse. The firm has accelerated its push through joint ventures with some of the world’s largest private equity managers as sponsors and corporates seek alternative financing.

Mubadala is one of three major sovereign wealth funds in Abu Dhabi. Together they oversee about $1.8tn, giving them significant influence over capital flows into private markets.

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