Abu Dhabi launches $125bn SWF with state funds merger

Mubadala Investment Company becomes the world's 14th largest sovereign wealth fund with around $125bn in assets.

Abu Dhabi has completed the merger of two state funds, creating the world’s 14th largest sovereign wealth fund.

Mubadala Investment Company will invest in sectors including private equity, real estate and infrastructure.

MIC combines the emirate’s stakes in Mubadala Development Company and International Petroleum Investment Company. The firm will invest in a range of sectors including acquisitions, construction and financing and has been established as a joint stock company. It has around $125 billion in assets.

The aim of the merger, announced in June, was to allow the newly formed investment firm to “create greater benefits and enhanced economic value” to the Abu Dhabi government by investing in sectors including financial investments, energy and utilities, technology, aerospace, healthcare and real estate.

Separately, Secondaries Investor understands that Mubadala Capital, the group’s in-house asset and investment management unit, is in “reasonably advanced” talks with investment firm Ardian to acquire a portion of Abu Dhabi’s stakes held in its private equity portfolio. The process, run by Campbell Lutyens, may involve moving Mubadala Development’s private equity assets into a new fund and is expected to close by the end of March, according to two sources familiar with the matter.

The sovereign wealth fund holds stakes in investment firms including Carlyle, Investcorp, and Mubadala Infrastructure Partners, a private equity fund also backed by GE and Credit Suisse, according to its website. It also holds stakes in companies including EMI Music Publishing and has invested in a €300 million co-investment fund with Caisse des Dépôts’ investment arm, focusing mainly on French private equity, real estate and infrastructure opportunities.

Mubadala Investment sits one notch ahead of Abu Dhabi Investment Council (ADIC), which has around $110 billion in assets, according to the Sovereign Wealth Fund Institute. ADIC sister fund Abu Dhabi Investment Authority is the world’s third largest sovereign wealth fund and has around $792 billion in assets.

Mubadala Investment’s eight-member board of directors includes chairman Sheikh Mohamed bin Zayed Al Nahyan and vice-chairman Sheikh Mansour bin Zayed Al Nahyan.

Campbell Lutyens declined to comment. Ardian did not return a request for comment.