Mubadala Investment Co. is testing U.S. investor interest in taking a stake in Fortress Investment Group as it aims to obtain regulatory sign-off on a deal to obtain most of SoftBank Group's ownership, according to people with knowledge of the matter.
The Abu Dhabi sovereign fund is talking to investors including some U.S. pension funds in an effort to reduce its expected 70% stake in Fortress, according to the people, who asked not to be named discussing confidential negotiations.
Mubadala is also looking to secure commitments to the next private equity fund managed by Mubadala Capital, its $20 billion asset management subsidiary.
The Committee on Foreign Investment in the U.S. is reviewing Mubadala's planned takeover of Fortress amid concerns over the United Arab Emirates' ties to China. Paring Mubadala's stake could help it address foreign ownership concerns.
Representatives for Mubadala and Fortress declined to comment.
Mubadala and Fortress agreed in May to buy 90% of the equity held by Japanese conglomerate SoftBank in the U.S. asset manager. If the deal goes ahead, Mubadala Capital would own 70% of Fortress and the Fortress management team would own 30%.
Mubadala currently owns 9.99% of Fortress in its private equity funds II and III as part of a deal with SoftBank, which bought Fortress in 2017, according to a statement.
Mubadala has applied for CFIUS review, which is standard, and is working with the appropriate regulatory officials as it has before, a representative for the fund told Bloomberg earlier.
The Financial Times earlier reported on the CFIUS review.
Buoyed with cash from last year's commodity boom, Abu Dhabi — one of few cities to manage over $1 trillion in sovereign wealth — is seeking to extend its influence on the global stage, investing billions of dollars to diversify its economy away from crude.