Abu Dhabi’s ADIA awards $490m mandate to Australian real estate investor Qualitas

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Abu Dhabi Investment Authority (ADIA), the biggest sovereign wealth fund in the United Arab Emirates, has awarded a A$700 million ($490 million) mandate to real estate investment manager Qualitas to invest in Australia.

In a statement, Qualitas said the mandate is to invest in Australian commercial real estate (CRE) private credit opportunities on behalf of a new investment vehicle.

The mandate will be carried out through the newly created Qualitas Diversified Credit Investments (QDCI), a full discretionary investment vehicle. QDCI will have a wide investment scope with a focus on the growing Australian CRE private credit market and senior credit strategies.

“The mandate is well-timed to coincide with the current dislocation in global markets, driving increased volatility and hesitancy by traditional funding sources to deploy capital. This has led to rising benchmark returns and risk premiums in Australia,” according to the announcement.

Qualitas is co-investing 5% or A$35 million in the QDCI, which is consistent with the objectives of the capital raised in the Initial Public Offer (IPO). Per the announcement, QDCI will not be open to other investors.

The mandate increases Qualitas’ total committed funds under management (FUM) to circa A$5 billion focused on CRE credit and equity opportunities.

Aside from the A$700 million mandate, ADIA also agreed to acquire up to 9.99% of Qualitas, conditional on the sovereign wealth fund committing further incremental investment mandates totalling A$1 billion.

The Sydney-listed firm said the option will be exercisable in tranches if ADIA increases its investment mandates within the next two years.

Andrew Schwartz, group managing director and co-founder of Qualitas, said the award of the mandate is timely given the growing opportunities for investors in Australia CRE private credit as banks continue their retreat from this sector.

Established in 2008, Australia-based Qualitas focuses on real-estate equity and debt investing. The firm has invested in financed assets valued at more than $11 billion.

Qualitas invests in senior debt, preferred equity, mezzanine debt – a hybrid between debt and equity, and many more, and manages the funds of institutional firms from Australia, Asia and Europe.