Mubadala Capital closes second investment fund in Brazil after raising $710m

In February last year, the company closed its first fund in Brazil with total commitments of $322 million

Mubadala Capital began operations as a wholly owned asset management unit of Mubadala Investment Company in November 2021. Photo: Mubadala

Mubadala Capital's second fund in Brazil closes after raising $710 mln

Mubadala Capital, the asset management subsidiary of Mubadala Investment Company, has closed its second investment fund in Brazil with total commitments of more than $710 million.

Brazil Special Opportunities Fund II, or BSOF II, 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, Mubadala said in a statement.

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

“The consummation of our second Brazilian flagship fund marks a decade long track-record of successfully operating and investing in Brazil,” said Oscar Fahlgren, Mubadala Capital’s chief investment officer and head of Brazil strategy.

“We believe that the success of this fundraise is a testament to both our consistent investment strategy and the strength of our local investment team who continuously seek to drive positive outcomes for our investors.”

BSOF II will invest primarily in control positions in mature companies that are facing some form of complexity or distress, but where the underlying business fundamentals are compelling, Mubadala said.

This strategy will enable BSOF II to acquire such businesses at attractive entry points, 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 upside exposure associated with a growing economy.

“BSOF II seeks out situations where value can be created immediately upon closing of the transaction as any underlying complexity is typically immediately resolved, creating a pathway to delivering strong risk-adjusted returns to our investors,” the statement said.

In February last year, Mubadala Capital closed its first fund in Brazil with total commitments of $322 million.

Mubadala Capital began operations as a wholly owned asset management unit of Mubadala Investment Company in November 2021 as part of Mubadala's plans to “rigorously pursue” investment opportunities around the globe.

Set up in 2011, Mubadala Capital has grown significantly in scale over the past decade, with offices around the world. It manages nearly $20 billion in aggregate across its own balance sheet investments and third-party capital vehicles across its private equity, solutions, venture capital and Brazil businesses.

Brazilian exports to the UAE reached $714.07 million in the first quarter of this year, while its imports from the UAE amounted to almost $357 million, the Arab-Brazilian Chamber of Commerce said in a statement in April.

In April, Mubadala Capital's energy company Acelen said it would invest $2.5 billion in the next 10 years to produce renewable diesel and sustainable aviation kerosene in the north-eastern Brazilian state of Bahia.

Acelen – which owns the Mataripe Refinery in Bahia, Brazil's second biggest and one of the oldest in the country – plans to start production in 2026.