Mubadala Capital in tie up to manage funds for France’s Ardian

The financial investment arm of Abu Dhabi’s Mubadala Development Company, has announced a US$2.5 billion deal with private equity firm Ardian for the creation of a new private equity fund.

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Mubadala Capital, the fin­ancial investment arm of Abu Dhabi’s Mubadala Development Company, has announced a US$2.5 billion investment deal with French private equity firm Ardian, which includes the creation of a private equity fund.

Under the terms of the transaction, Ardian will invest $1.75bn to acquire a majority stake in an existing $2.5bn Mubadala Capital private equity portfolio, which includes interests in predominantly North American buyout and growth funds as well as 14 direct investments.

Ardian, which manages about $60bn worth of assets, will also invest $750 million in a new $1.5bn portfolio established by Mubadala Capital, which will invest the same amount.

The new fund will focus on “partnering with best-in-class management and investment teams across multiple sectors, including sports, media, entertainment, consumer food, energy infrastructure and others” in North America and Europe, Mubadala said in a statement yesterday.

The tie up with Ardian comes after reports circulated last year that Mubadala Capital was in discussions to launch a fund to co-invest with outside partners on private equity deals, with reports of discussions between the two parties surfacing in January.

The transaction, which closed on March 31, is the first time that Mubadala Capital has accepted money from a third-party investor.

“Managing funds on behalf of third-party investors is both an endorsement of our strong investment track record and part of a longer-term strategy to further institutionalise the Mubadala Capital platform,” said Waleed Al Muhairi, Mubadala’s deputy group chief executive and chief executive of the company’s emerging sectors platform.

Sovereign investors such as Singapore’s Temasek have also executed similar deals, bringing in outside institutional investors.

In 2014, Temasek launched Astrea II, a co-investment vehicle in which Ardian was an investor.

“This deal represents one of Ardian’s largest transactions with a sovereign wealth fund. We look forward to developing our relationship with Mubadala Capital, and continuing to support their team going forward,” said Vincent Gombault, Ardian’s head of funds of funds and private debt.

Mubadala Capital, which was established in 2011, manages more than $10bn worth of assets, and holds stakes in international investment firms including the Carlyle Group, Verno Capital and Bahrain’s Investcorp.

In December, Mubadala Capital became the first major Abu Dhabi-based entity to set up under the jurisdiction of Abu Dhabi Global Market, the capital’s new financial free zone.

* With agencies

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