Qualitas has announced a commitment of up to $300 million from a wholly owned subsidiary of ADIA for its existing Qualitas Diversified Credit Investments (QDCI) platform.
According to Qualitas, this marks ADIA’s third commitment to QDCI and brings the total committed capital to $1.67 billion since ADIA’s initial investment in August 2022.
Of ADIA’s latest commitment, some $220 million will be activated immediately for deployment, while the remaining $80 million will be activated at ADIA’s discretion.
The mandate continues to have a wide investment scope, focusing on the growing Australian commercial real estate (CRE) private credit market and senior credit strategies.
Moreover, Qualitas’ co-investment in QDCI remains at $50 million.
Andrew Schwartz, Qualitas group managing director and co-founder, said: “QDCI has performed well since inception and the pipeline continues to grow”.
“This latest increase in commitment from ADIA demonstrates the depth of opportunities within the Australian CRE private credit market and further evidences Qualitas’ ability to attract, retain, and grow our institutional investor base – a key differentiator in the current environment,” Schwartz said.
In 2022, Qualitas granted options to ADIA under which it may acquire up to 32,630,374 new ordinary shares in Qualitas, representing up to 9.86 per cent of issued equity on a fully diluted basis, if it committed incremental investment mandates totalling up to $1.7 billion.
Following ADIA’s latest commitment, it can now exercise options in respect of up to 29,367,337 shares based on the activated component increase of $220 million.
Qualitas clarified that the strike price is based on the volume-weighted average issue price of its shares, currently at $2.50 per share.
It also said it gives no assurance that all or any of the options that are now exercisable will be exercised, with any options not exercised expiring on 1 August 2024.
The activated commitment brings Qualitas’ total funds under management to $8.9 billion, representing 8.8 per cent growth from 31 December 2023.
In August 2023, at the time of ADIA’s second commitment, Schwartz said: “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”.
“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.”
