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Mubadala now owns a majority stake in US asset manager Fortress Management: Mubadala Capital and Fortress Investment Group have completed the acquisition of 90.01% of Fortress Management’s’ shares previously held by Japanese SoftBank Group, according to a statement.
Remember: The Committee on Foreign Investment in the United States (Cfius) granted approval for Mubadala Capital to acquire a 70% majority stake in US asset manager Fortress earlier this week, after the investor agreed to concessions regarding data security and operational control.
Concessions? The Financial Times had previously reported that Cfius was scrutinizing the transaction last July, amid concerns over the UAE’s ties to China. The concessions involved ensuring that Fortress’ data and technology will remain inside the US, and that day-to-day management will be in the hands of Fortress management. This means Fortress retains “full autonomy over investment processes and decision making, personnel and operations,” it said in the statement.
It’s not just Mubadala: State AI group G42 had offloaded all its stakes in Chinese businesses in a bid to appease US partners, including a USD 100 mn stake in TikTok parent company ByteDance. The company was also prepared to give up use of Huawei equipment. These moves made way for a USD 1.5 bn investment from Microsoft in April.
Ownership breakdown: Fortress management now controls 32% of the company’s equity, allowing them to appoint a majority of board seats. Mubadala Capital leads the consortium owning the remaining 68%, with Hani Barhoush, CEO of Mubadala Capital, retaining his board position.
The acquisition has been a long time coming: Mubadala and Fortress’ management had agreed to buy a 90% stake from Fortress’ parent company, Japanese tech conglomerate SoftBank, in May 2023.
ADVISORS- Ardea Partners acted as Mubadala’s financial advisor and Shearman & Sterling (now A&O Shearman) served as legal counsel. Goldman Sachs served as financial advisor and Kirkland & Ellis served as legal counsel to Fortress senior management. Skadden, Arps, Slate, Meagher & Flom represented Fortress in the transaction. The Raine Group was SoftBank’s financial advisor while Morrison Foerster provided legal counsel.
