The Scoop
Mubadala Capital has raised $554 million for its first co-investment fund, surpassing its initial target in the latest sign of growing investor appetite for exposure to the firm’s deal flow.
The Mubadala Capital Co-Investment Fund attracted investors from Asia, Europe, the Middle East, and North America, and aims to do around eight deals a year, investing in companies alongside Abu Dhabi’s $360 billion sovereign wealth fund or other global private equity firms.
“This fund really came about in response to investor demand,” Fatima Al Noaimi, co-head of Mubadala Capital Solutions, said in an interview. “Global investors recognise the quality and attractiveness of the co-investment deal flow we have access to.”
Mubadala Capital — the external asset management arm of the Abu Dhabi sovereign wealth fund — initially targeted about $400 million for the vehicle. “This was one of the fastest fundraising for us, in what is a quite challenging environment, and we attracted a lot of new investors,” said Maxime Franzetti, co-head with Al Noaimi. “Our fundraising efforts are increasingly becoming easier and quicker.”
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Mubadala Investment Co. launched Mubadala Capital around 15 years ago. It has since become the first sovereign wealth fund to take in third-party capital, and now manages around $30 billion.
Gulf sovereign funds were established to invest surplus oil revenues abroad and promote economic diversification at home. As they have grown, they have become important sources of capital for global markets, backing some of the world’s biggest M&A deals and forging close relationships with global investing giants like BlackRock and KKR.
Mubadala is one of the world’s most active sovereign wealth funds, giving it access to deal flow across the globe. Mubadala Capital is opening up that pipeline to external investors, as well as sourcing its own investments.
Despite its enviable connections in Abu Dhabi — the self-proclaimed “capital of capital” — the asset manager is assessed by external investors based on its own track record, said Franzetti. “We’re standing on the back of a giant,” he said. “But we’re judged by investors independently from Mubadala, and if we don’t perform we wouldn’t be around.”
The new co-investment fund will focus on deals in North America and Europe and has already started deploying capital. The firm is preparing to launch a second co-investment fund, Al Noaimi said.
Notable
- Investment firm TWG Global took a stake in Mubadala Capital last year, joining other firms including Silver Rock that have become shareholders in the company, Bloomberg reported.