- ADIA initially invested A$700M into QDCI in August 2022.
- QAL today announced an additional A$700M was committed by ADIA.
- The commitment brings QAL total FUM to A$7.5B.
Alternative real estate investment manager, Qualitas (ASX: QAL), has secured an additional A$700 million commitment from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) for the existing Qualitas Diversified Credit Investments (QDCI).
The additional commitment brings the total ADIA investment in QDCI to $1.45 billion, with the initial A$700 million investment made in August 2022; the initial investment from ADIA led to the establishment of QDCI.
The ADIA investment also brings Qualitas’ total funds under management (FUM) to A$7.5 billion, of which 78%, or A$5.8 billion, is in private credit and 81% is invested on behalf of institutional investors.
Qualitas’ co-investment in QDCI has increased from A$35 million to A$50 million.
“A repeat commitment at this scale from a long-term strategic investor such as ADIA is a strong endorsement of Qualitas’ funds management platform, growth potential, as well as our track record and experience through multiple cycles in the highly specialised Commercial Real Estate (CRE) sector,” said Qualitas group managing director and co-founder, Andrew Schwartz.
“We have demonstrated rapid and consistent growth since our IPO in December 2021 growing FUM by circa 80% despite this being one of the most dynamic macroeconomic environments we have experienced in our 15-year history.
“We have continued to execute on our growth initiatives, attracting larger mandates from investors and deploying into larger investments with a continued focus on sponsor quality.
“Since the financial year ended on 30 June 2023, we have raised A$1.45 billion incremental capital in the Australian CRE private credit sector. This represents strong evidence of conviction in the sector from global institutional investors. Qualitas’ CRE private credit funds are delivering returns exceeding inflation on a compounding basis with downside protection.
“With the announcement of this mandate, Qualitas has A$2.3 billion dry power ready to be deployed into the Australian CRE sector to take advantage of further dislocation in the financing market, as traditional financiers appear to continue to retreat, particularly in the residential and development sectors.”
The initial tranche of options is now exercisable
Qualitas granted options to ADIA in August 2022, under which ADIA may acquire up to 32,630,374 new ordinary shares. This new mandate means ADIA can exercise its options to acquire an initial tranche of 22,841,263 ordinary shares at a strike price currently at A$2.50 per share until the options expiry date of 1 August 2024.
ADIA holds options for the issue of three additional tranches. Each tranche of options has 3,263,037 ordinary shares in Qualitas with the same expiry date as the initial tranche options.
Each tranche is exercisable upon financial close of A$100 million additional commitments under Qualifying Mandates.