(Bloomberg) -- Oaktree Capital Management-backed 17Capital is expanding into Dubai as it seeks to capitalize on growing interest in the niche area of net-asset-value lending in the Middle East.

17Capital has received all the necessary approvals and licenses from local authorities, a representative for the firm told Bloomberg News. Its operations in the region will be led by Pierre Garnier, a senior investment director who joined 17Capital in 2018 from Lazard Inc.

The firm is among a small but growing group of lenders specializing in NAV financing — an increasingly popular form of borrowing for private equity funds that need liquidity amid a tough market for cashing out holdings. 17Capital is backed by Oaktree, the asset manager co-founded by Howard Marks, which bought a majority stake in the business in 2022.

The move reflects the growth of NAV lending in general and a boom in the private credit industry in the Middle East.

“The Gulf is an important global financial center and one where we believe the opportunity for NAV finance is growing quickly,” said Augustin Duhamel, managing partner at 17Capital. 

While NAV financing has sometimes been considered controversial, because it lets managers layer more leverage on their funds late in their cycle, there are an rising number of big names getting involved in the lending style.

Bloomberg reported earlier this month that Pemberton Asset Management is raising at least $1 billion along with Abu Dhabi Investment Authority for a new strategy that will focus on NAV financing. AllianceBernstein Holding LP is also making a push into the asset class, while Apollo Global Management Inc. and HPS Investment Partners already offer such loans.

17Capital, which employs nearly 100 people across Europe and North America, said it plans to scale up its headcount in the Gulf, where it estimates there is currently around $5 billion of capital available that is potentially deployable into a NAV financing-focused fund.

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