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Mubadala’s direct investment capabilities reach maturity – PitchBook News & Analysis

It is no secret that limited partners like sovereign wealth managers and pension funds have been increasingly seeking to deploy capital on their own in recent years, as opposed to paying fees for others to invest on their behalf. 
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It is no secret that limited partners like sovereign wealth managers and pension funds have been increasingly seeking to deploy capital on their own in recent years, as opposed to paying fees for others to invest on their behalf. 
 
Mubadala, a United Arab Emirates wealth fund, is one example of a limited partner flexing its muscles to transform itself into a significant GP.  
 
The Abu Dhabi state fund, which is an anchor investor in SoftBank’s debut Vision Fund, has worked for years to lay the groundwork for more direct investing. Now as that capability comes of age, the firm is increasing the speed and scope of its direct investing. 
 
Mubadala participated in 157 direct investments in 2021—up from just 45 the year prior—spanning buyouts, growth equity investments, seed investments and early- and late-stage VC, according to PitchBook data. 
 
This year, even as uncertainty roils the markets, Mubadala isn’t letting up. The firm has participated in 151 deals buying direct stakes in businesses so far this year, including tech startups and infrastructure companies, PitchBook data shows. 
 

 

 
As the sovereign wealth fund matures and gains experience from its relationships with external managers including SoftBank, its transition to a more active investment role and increasing involvement in direct investments makes sense, said Daniel Brett, the head of research and data at Global SWF.  
 
Acting as a GP allows the sovereign investor to attain better yields instead of seeing its profits eroded by management fees and carries, and it also helps to strengthen Abu Dhabi’s soft power and bolster the nation’s business ties with other countries, Brett said. 
 
“The moves are due to its own desire to become a more mature, proactive and diverse investor,” he said. 
 
Mubadala, through its asset management arm Mubadala Capital, originates and syndicates investments directly, and that sets it apart from many other sovereign investors who may rely on their GPs to source deals and conduct due diligence, according to Alaa Halawa, executive director and head of US ventures for Mubadala Capital, which was launched in 2011.
 
“The majority of our business that we build on the ground is thesis-driven, original and our own origination of deals. We lead deals. We syndicate deals. We sit on boards,” he said. 
 
Mubadala has previously made direct investments in businesses or co-invested alongside other fund managers. It backed companies like Hollywood talent agency and media company Endeavor and Alphabet’s self-driving car unit Waymo, as well as Jio Platforms, a provider of internet services in India. 
 
However, the firm’s pace of acquiring direct stakes in companies has grown in pace and scale in the last two years,  PitchBook data shows. The increasing activity follows a string of moves made …….

Source: https://pitchbook.com/news/articles/mubadala-direct-investments-sovereign-wealth-fund

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