Mubadala Capital is adopting a more assertive approach to dealmaking, entering complex deals that the private equity industry’s titans dread and taking part in multibillion-dollar buyouts that many other sovereign investors tend to steer clear of.
This week, investment fund Mubadala Investment Co.’s alternative asset management division agreed to purchase billboard company Clear Channel Outdoor Holdings Inc. and promised to invest $3 billion in the company. According to a senior executive, the fund will keep looking for these kinds of deals.
In an interview, Chief Investment Officer Oscar Fahlgren stated, “We are searching for big, complicated projects where we can unlock the complexity and generate alpha for our investors.” “We will continue to look at circumstances that are similar going forward, and the Clear Channel merger is a wonderful example of that.”
Clear Channel is worth $6.2 billion, including borrowings, according to the transaction. According to statistics provided by Bloomberg, the company has a stable of appealing assets, but it has been hindered by excessive debt levels, totaling over $5 billion.
The takeover, according to Mubadala Capital, is an example of the type of dealmaking that distinguishes it from the $1 trillion Abu Dhabi Investment Authority as well as its parent. Although those funds usually engage in minority projects, Mubadala Capital has adopted a different strategy.
In late 2024, it pulled out the big guns by purchasing Canadian mutual fund firm CI Financial Corp., one of the biggest financial sector privatizations ever carried out by an Abu Dhabi company. Only a few months had passed since it completed the acquisition of Fortress Investment Group.
According to Fahlgren, “complexity in transactions is not a desirable circumstance for the majority of huge buyout funds today.” “To build long-term value, we welcome complexity and delve deeply into such situations.” That sets us apart from the others.
$2 trillion city
Mubadala Capital oversees, counsels, and manages investments worth over $430 billion. Hani Barhoush, a former Merrill Lynch banker who has managed the fund since its creation and serves as the head of Mubadala Investment’s credit and special situations platform, is in charge of it.
With offices in Abu Dhabi, New York, London, San Francisco, and Rio de Janeiro, the fund employs more than 200 experts overall.
Founded in 2011, Mubadala Capital is one of several Abu Dhabi organizations that together manage assets valued at over $2 trillion, a landscape that has recently undergone significant changes.
Sheikh Khaled bin Mohammed, the crown prince of the emirate, chairs L’imad Holding Co., which last month acquired wealth fund ADQ. On Friday, International Holding Co., the largest listed company in Abu Dhabi, established a new financial-services holding company that will manage approximately 870 billion dirhams ($237 billion).
Mubadala Capital has taken a number of actions over the years to set itself apart from the city’s sovereign wealth structure. The fund was the first to manage foreign capital for international institutional investors; additional Abu Dhabi funds have since adopted this strategy. Additionally, it has sold sections of itself to outside investors twice, which is uncommon for sovereign investors.
The most recent such transaction occurred last year when a stake was purchased by TWG, the investment firm headed by banker Thomas Tull and founder Mark Walter of Guggenheim Partners. On the Clear Channel transaction, the two are working together.
As Fahlgren put it, “We prefer to think of ourselves as specialized generalists in a way.” “We do not believe that purchasing assets from other buyout companies in the market will result in long-term value creation, and we are not searching for auction processes.”
