Gulf uncertainty opens door to private credit, says fund manager - Arabian Gulf Business Insight

Uncertainty in the Gulf is prompting more mid-sized private companies to seek private credit as banks become more cautious, according to Sikander Ahmed, head of Mena private credit at Janus Henderson, speaking to Arabian Gulf Business Insight (AGBI). Ahmed said geopolitical events cause banks to shy away from lending to private companies, while bank balance sheets are shifting toward the public sector. He said borrowers are willing to pay higher interest rates for flexibility and speed, which produces better returns for lenders. He attributed the increased caution to macroeconomic and geopolitical uncertainty linked to the Iran and Yemen wars.

The comments followed the second fundraising close of Janus Henderson's fourth Mena private credit fund, a sharia-compliant vehicle that has secured $191 million in investor commitments. Most of the fund's lending goes to companies headquartered in Saudi Arabia and the UAE, though these typically have pan-regional operations. Ahmed said the fund is sector agnostic but generally focuses on defensive industries such as healthcare, education, manufacturing, business services and logistics, and does not invest in real estate or commodities trading. Across its four private credit funds, the team has raised $700 million from investors since 2008, when it launched the Gulf's first private credit fund at Kuwait's NBK Capital Partners; Janus Henderson acquired NBK Capital Partners in 2024.

Moody's Ratings estimates Gulf private credit funds managed about $2.3 billion in 2025, which it describes as small but entering a period of rapid expansion. Moody's estimates lending to small and medium-sized companies represents just 2 percent of total Gulf bank sector credit. It cites economic diversification, large infrastructure requirements and SME financing gaps as drivers of demand for non-bank capital, while warning that the key credit risk is looser underwriting as capital supply increases. It also noted that conservative documentation and concentrated institutional capital currently benefit the GCC market, although these mitigants may weaken as the asset class scales.

The article places the Gulf trend against wider scrutiny of private credit. The Federal Reserve estimates US private credit loans totalled $1.5 trillion in late 2025, nearly 5 percent of US GDP. The IMF warned in April that the sector's opaque funding arrangements create financial stability concerns, and JPMorgan Chase chief Jamie Dimon has warned of problems in the asset class. Ahmed criticised the onward sale of private credit loans and US funds marketing illiquid assets as semi-liquid instruments, which he said was causing the real issue. Ahmed argued that mid-market companies are underserved and under-capitalised and that the macro situation is driving companies to secure funding for the next two years, so demand for private credit is rising.