Abu Dhabi investment and development company Mubadala has acquired 20% ownership in Bahrain-based investment management company Investcorp. According to a statement on the acquisition, the deal will be executed in two phases- with Mubadala acquiring a 9.99% ownership with immediate effect, and another 10.01% stake set to be transferred post regulatory processes. The valuation of the deal was not disclosed. Commenting on the stake sale, Mohammed Mahfoodh Alardhi, Executive Chairman, Investcorp says that the development is “a significant milestone in the institutionalization of our [Investcorp’s] shareholder base.”
While Investcorp’s current ownership lies with institutional investors from the UAE, Bahrain and Qatar, individuals and family offices, a Bloomberg report attributes the move to Investcorp’s efforts to increase its investor base by attracting more sovereign wealth funds. Investcorp also aims to expand its investments portfolio and rebuild its hedge-fund business. According to information hosted on its website, Investcorp manages more than $10 billion of assets currently, and their past and present portfolio includes 150+ investments across industry sectors. With offices in in London, New York, Bahrain, Riyadh, Doha and Abu Dhabi, Investcorp’s investments are in the nature of private equity, real estate, and alternative investments. Corneliani, Nobel Learning Communities, Arvento and L’azurde are a few of Investcorp’s current investments. The company is perhaps best known for having backed companies such as Tiffany & Co. and Gucci in the past.
The buyer Mubadala, an investment and development company, has been focused on diversifying Abu Dhabi’s economy away from its oil assets. Recently in June, with an eye on consolidation, Mubadala itself merged with International Petroleum Investment Company (IPIC) -a company formed by Abu Dhabi government to invest in energy and related sectors- under a resolution issued by H.H. Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. Bloomberg calculations place the combined assets of IPIC and Mubadala at about $135 billion and debt at around $42 billion.
A statement on the WAM news agency mentions that the state expects the integration to create “enhanced economic value” to the Abu Dhabi government, and also serve the purpose of contributing to the diversification of the economy. Mubadala’s portfolio includes global organizations such as US-based Advanced Micro Devices and private equity firm Carlyle Group, Emirates Global Aluminium, Bahrain’s Tatweer Petroleum and more. The Mubadala-IPIC merger is the second major deal for the Emirate, after reports of a merger between its lenders National Bank of Abu Dhabi and First Gulf Bank (FGB) taking shape.Related: The How-To: Setting Up A Business In Abu Dhabi