[DUBLIN] Credit Suisse Group and Qatar Investment Authority (QIA) are joining forces to set up a multibillion-dollar platform to invest in direct lending.

The partnership will make loans to upper middle-market and large-cap companies in the US and Europe, the Swiss bank and QIA said in a joint statement on Thursday. The financing will mainly consist of first or second ranked loans which are secured against the business.

Sovereign wealth funds were important early investors in the now US$850 billion private debt asset class with players like Singapore's GIC establishing their own direct investment teams. In July, Apollo Global Management said it would seek to lend about US$12 billion over the next three years via a financing platform anchored by Abu Dhabi's Mubadala Investment Co.

The partnership is part of a trend among sovereign wealth funds moving into private markets to seek higher yields, said Diego Lopez, a managing director at Global SWF, a data provider. Global SWF has seen higher levels of activity by sovereign wealth funds this month, implying that investors think that the worst of Covid-19 may be over, added Mr Lopez.

The Qatar platform will be part of Credit Suisse Asset Management's Credit Investments Group led by John Popp, its global head and chief investment officer. QIA is a shareholder in Credit Suisse and has other investment partnerships with the bank.

BLOOMBERG

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