Apollo Global Management has invested more than $1 billion in Mubadala Capital as it aims to boost the Abu Dhabi sovereign wealth fund's expansion in North America, Apollo's chief executive has said.
The investment, which gives New York-based Apollo less than a 10 per cent stake in Mubadala Capital, is part of its strategy to partner with "other like-minded asset managers who we respect and have economic alignment that is good for them and good for us", Marc Rowan exclusively told The National in an interview in Abu Dhabi.
"Mubadala is, among the sovereign funds, probably the most advanced in the creation of its own asset manager, and this is a chance for us to help them accelerate their growth, particularly in North America," he said.
Apollo's investment in Mubadala is "a little over a billion dollars", Mr Rowan added. Other strategic investors will also join as minority shareholders in Mubadala Capital, with an expected commitment of $5 billion to the firm’s investment strategies.
Apollo, which has about $1.05 trillion in assets under management, is also planning to increase the scale of its investment in the UAE, while describing its competition with Mubadala as "healthy" and its relationship with Mubadala's chief executive, Khaldoon Al Mubarak, as having a healthy level of "respect".
Apollo has maintained close ties with Mubadala Investment Company in recent years, including a $2.5 billion private credit joint venture and a series of financing partnerships. Abu Dhabi developer Aldar Properties earlier this year raised $1 billion in funding from Apollo to support its growth.
The relationship forms part of the Abu Dhabi sovereign investor's efforts to expand its global investment network and deepen partnerships with major international asset managers.
"The asset management business is incredibly competitive and the notion that it's a zero-sum game, I think, is a false notion. We're all friends and competitors, so I look at our business more broadly," Mr Rowan said.
"We power competitive asset managers and, with Mubadala, we get to power someone who is a partner, and they will build an asset management competitor to what we do. All good."
'A trillion dollars for infrastructure'
Mr Rowan said Apollo was confident about doing more business in the UAE. Although he acknowledged lingering risks in the region as a result of geopolitical conflicts, he said that businesses had been able to adapt.
"You are going to see us ramp up our activity here tremendously. It goes to this whole notion of what is risk. Is it riskier today here, or was it riskier a year ago? Common sense says it's riskier today," Mr Rowan said.
"[But] everyone has adapted to the situation. We now know what the outcome is. It doesn't mean there won't be continued hostilities, but in terms of the unknown, we have less risk today than we did a year ago."
Mr Rowan also expects countries in the region to spend about $1 trillion "hardening" their infrastructure, building alternative routes, transport systems and "all of the other things that this level of hostility has now pointed out need to be done".
Those regional investments will also include ventures into artificial intelligence, which makes the region "so dynamic", he said.
"We want to be a part of all of it. That doesn't mean we will do all of it because the scale of capital is beyond anything one firm or one organisation can do," he said.
"What we're seeing in the region is a recognition that the capital needed to do everything that these countries need to do will have to be global capital."
Pragmatic on AI
Last week, Citadel chief executive Ken Griffin and Blackstone president Jon Gray gave contrasting views on AI. Mr Griffin said the sector was "almost certainly" in a bubble, while Mr Gray continues to bet big on the technology, taking up stakes in OpenAI and building a $200-billion data centre portfolio.
Mr Rowan, however, sits in the middle. He said both arguments can be true, noting how the dynamics of the AI market are balancing themselves.
"We are seeing unbelievable demand for compute, particularly in a supply-constrained market in the short term, and to the extent we get regulation and we have anti-data centre sentiment, those people who hold existing powered assets are going to see their assets go up in value because what they are able to provide is something that's in short supply," Mr Rowan said.
"Jon is right on that, at least for the foreseeable future ... the valuation at which someone is willing to pay reflects their bet not only on what's happening currently, but that this will continue in the future," he added.
Meanwhile, as interest rates and the cost of capital have been going up, the market has yet to go through a correction, which is what has historically happened, Mr Rowan said.
"And on that side, I think Ken is stating the obvious. We have not seen the normal economic behaviour associated with this."
