Mubadala Investment Company and US-based private equity manager Silver Lake are to partner on a long-term investment strategy backed by a $2 billion investment from Abu Dhabi's strategic investment fund.
The strategy is based on a unique, 25-year lifecycle, which is much longer than the typical 7-10 year approach taken by private equity firms, and will be flexible in terms of investment structures, geographies and industries, a joint statement from the companies said on Wednesday. Mubadala has also taken a minority stake in Silver Lake, which specialises in technology investments. The terms for that deal were not publicly disclosed.
“As an institution that has long seen the potential of investing in the technology sector, we are excited to partner with Silver Lake, one of the world’s most respected technology investors, to capitalise on major opportunities within and beyond the industry,” said Khaldoon Al Mubarak, managing director and chief executive of Mubadala.
"Technology is the bedrock of the global economy, and fundamental to all other sectors that are being significantly digitalised. Our goal is to be well positioned to take advantage of this accelerated digital transformation and its potential, and we believe Silver Lake is the right partner and that this is an optimal structure for us.”
Silver Lake is a Silicon Valley-based firm with more than $60bn in combined assets under management and committed capital. It has invested in some of the world's best-known technology companies including AirBnb, Chinese payments giant Ant Financial, Expedia Group and Twitter. It has also made a minority investment in Abu Dhabi-owned City Football Group.
Mubadala and Silver Lake have previously collaborated on investments in a number of technology ventures, including entertainment and sports group Endeavour, Alphabet-owned driverless technology company Waymo and Reliance Industries' Jio Platforms.
Mubadala bought its minority stake in Silver Lake from Dyal Capital Partners. Dyal, a unit of investment management company Neuberger Berman, bought a non-voting equity interest of less than 10 per cent in Silver Lake in 2016 and will retain roughly half of its original investment, the statement said.
This is Mubadala's third major investment into a vehicle owned by a large, alternative asset manager in the past three months. Earlier this month, it became the lead investor in Barings Mubadala Enterprise, a private credit fund seeking to provide up to $3.5bn in mainly senior secured loans to European corporate entities over the next 18 months.
This followed on from a cornerstone investment in a $12bn private credit platform focused on large-scale direct lending rolled out by Apollo Global Management in July.
“We are extremely pleased to deepen our partnership with the visionary team at Mubadala, firmly rooted in our orientation as a long-term investor in the most iconic and enduring businesses,” said Silver Lake co-chief executives Egon Durban and Greg Mondre.
“Mubadala’s support has enabled us to launch an innovative strategy that is unprecedented in its multi-decade time horizon, underscoring our long-term commitment to our portfolio companies and providing tremendous strategic advantages as we seek to generate exceptional results for many years to come."
Silver Lake said the structure of its new strategy with Mubadala allows it to "capitalise on a wide range of investment opportunities, including those outside the mandates of our existing funds".
Mubadala, which has a $232bn portfolio spanning five continents, has interests in a range of sectors from aerospace and healthcare to real estate, utilities and oil and gas.
It has been a significant investor in technology companies for more than a decade, starting with chip maker AMD in 2007. It committed $15bn to Softbank's first Vision Fund and has its own technology funds in the US, Europe and the Middle East.
