Apollo deepens Abu Dhabi ties with investment in Mubadala Capital

What happened

Apollo Global Management will acquire a minority stake in Mubadala Capital, nearly 10% according to a person familiar with the matter. Apollo is expected to commit an aggregate $5 billion to Mubadala Capital's investment strategies alongside other strategic investors joining as minority shareholders.

Confirmed

Global impact / market context

The $5 billion commitment gives Mubadala Capital more money to invest and Apollo a stake in a Gulf-linked manager. This ties two large investment firms closer together and may help Apollo win more business from sovereign wealth funds, which are state-owned investors.

Analyst inference

Global investment companies have been building ties with the Gulf region, drawn by proximity to some of the world's largest sovereign wealth funds. Abu Dhabi wealth funds together manage an estimated $1.8 trillion, and Mubadala had $385 billion in assets under management at the end of last year.

Analyst inference

What to watch

1. Mubadala Capital said it will continue to operate independently and maintain its own governance structure once the deal is completed, so watch whether that operating independence holds after Apollo becomes a minority shareholder. Confirmed
2. Watch whether Mubadala Capital broadens its investor base and expands its strategies, steps it said Apollo's investment will help it pursue, and whether the promised $5 billion commitment is fully deployed. Proposed
3. Watch whether closer Apollo-Mubadala ties lead to more Apollo fundraising from Abu Dhabi sovereign wealth funds, since the article says these funds are increasing exposure to alternative investments. Analyst inference

Evidence

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