NEW YORK, Dec 11 (Reuters) - AlpInvest Partners, the

secondary investments unit of buyout firm Carlyle Group ( CG ),

and Abu Dhabi's Mubadala Investment Company are forming a new

partnership to provide debt financing to private equity firms,

according to a statement seen by Reuters.

As part of the new tie-up for senior fund financing, which

is also known as net asset value (NAV) financing, AlpInvest and

Mubadala will provide loans to private equity firms, helping

them borrow against their funds' assets.

NAV financing has become popular over the past few years as

private equity firms have struggled to sell portfolio companies,

after facing a tough environment for leveraged buyouts due to

high interest rates that made debt financing more expensive. The

prolonged deal drought hampered the efforts of buyout firms to

return capital to their investors, or limited partners (LPs).

Such financing deals help private equity fund managers raise

cash during lean times when they struggle to exit investments.

"As the private equity market returns to some normalcy,

these kinds of loans are going to be a really important part of

that return to normalcy," said Michael Hacker, global head of

portfolio finance at AlpInvest.

The partnership will provide a boost to AlpInvest, which has

facilitated about $4 billion in secondaries transactions since

2018. AlpInvest and Mubadala have completed their first

investment as part of the tie-up.

As part of the tie-up, Mubadala will broaden its credit

investment strategy to include senior loans against fund

portfolios. The move complements Mubadala's existing

co-investment initiatives in areas such as direct lending and

technology financing.

AlpInvest, which offers preferred and structured equity

solutions alongside traditional debt financing, currently

manages $80 billion in assets and counts more than 500

investors, according to its website.