Mubadala Capital closes first investment fund in Brazil

The fund raised a total of $322 million from a number of global investors

Mubadala Capital began investing in Brazil almost 10 years ago. Photo: Mubadala
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Mubadala Capital, the asset management subsidiary of Abu Dhabi's Mubadala Investment Company, closed its first fund in Brazil with total commitments of $322 million.

The Brazil Special Opportunities Fund I (Bsof I) raised capital from a "diverse set" of global investors, including a "leading public pension fund", family offices, corporates, private equity funds and asset managers across North America, Europe, the Middle East and Asia, the company said in a statement on Monday.

It did not, however, reveal details about the investors.

“We began investing in Brazil almost 10 years ago and over that time we have built a highly talented team with a differentiated approach to the market underpinned by maximising upside while simultaneously mitigating risk," Oscar Fahlgren, head of the Brazil strategy at Mubadala Capital, said.

The closing of Bsof I is a "meaningful vote of confidence by the market in our ability to originate compelling new investment opportunities and create value across our portfolio in order to deliver strong returns to our investors", he added.

Mubadala Capital began operations as a wholly-owned asset management unit of Mubadala Investment Company in November last year, as part of Mubadala's plans to “rigorously pursue” investment opportunities across the globe.

Set up in 2011, Mubadala Capital has grown significantly in scale over the past decade, with offices across the world. Along with its own balance sheet investments, the company manages over $10 billion of third-party capital on behalf of institutional investors in all of its businesses, including two funds in Brazil focused on special situations, three private equity funds, two early-stage venture funds and a public fund.

Mubadala was the first sovereign wealth fund to manage third-party capital on behalf of other institutional investors as it looks to diversify operations away from oil.

Bsof I is focused primarily on control positions in mature companies that are facing some form of financial or legal distress but where the "underlying business fundamentals are compelling", Mubadala Capital said.

"This strategy enables Bsof I to acquire businesses at attractive entry prices, creating a margin of safety at the closing of the transaction that reduces [the fund's] dependency on Brazil’s economic cycles, including currency depreciation, while retaining the upside exposure associated with a growing economy," it added.

In August, Mubadala Capital closed its $1.6bn third private equity fund that will focus on investing in sectors including media, sports, consumer and food services across North America and Europe.

The MIC Capital Partners III fund exceeded its fund-raising target after securing commitments from a number of global institutional investors.

Mubadala Capital has also made successful exits from EMI Music Publishing and Restaurant Brands International.

Updated: February 14, 2022, 4:51 PM