Mubadala Capital takes on first third-party assets in private equity deal with Ardian

Mubadala Capital, the investment unit of sovereign wealth fund Mubadala Development Co., Abu Dhabi, will for the first time manage third-party assets following a deal with French private equity firm Ardian.

The deal, which was completed March 31, involved a $2.5 billion commitment by Ardian in a secondary/primary structure, said a joint news release.

The secondary part of the deal sees Ardian acquire a majority stake in an existing Mubadala Capital-managed private equity portfolio. This comprises an existing $2.5 billion private equity portfolio of assets owned and managed by the firm, which consists of 14 limited partners interests — predominantly North American buyout and growth funds — and 14 direct investments. These direct investments include a number of co-investments alongside general partners.

The primary component involves the establishment of a $1.5 billion private equity fund by Mubadala Capital, in which Ardian is the lead investor. The fund has equal primary capital commitments from Mubadala Capital and Ardian. The strategy involves an integrated approach to making direct investments, co-investments and fund commitments, primarily in North America and Europe. It focuses on best-in-class management and investment teams across sectors including sports, media, entertainment, consumer food, energy infrastructure and others.

Ardian’s investments are being made through Ardian Secondary Fund VII, a spokeswoman said.

“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 institutionalize the Mubadala Capital platform,” said Waleed Al Mokarrab Al Muhairi, deputy group CEO and CEO of the emerging sectors platform at Mubadala Development Co., in the release. The sovereign wealth fund has $67.6 billion in assets.

Vincent Gombault, member of the executive committee, head of funds of funds and private debt at Ardian, said in the same release that the deal represents one of Ardian's largest with a sovereign wealth fund.

The release said Mubadala Capital, which was established in 2011, may take on third-party capital for other areas of the business in future.