G42’s China-focused fund is now run by Lunate: Abu Dhabi-based alternative asset manager Lunate has reportedly taken charge of managing IHC-backed AI outfit G42's China-focused fund, 42X Fund, Bloomberg reports, citing people familiar with the matter. A team will be appointed by Lunate to oversee the investment fund, which the business information service says holds stakes in various Chinese firms, such as TikTok parent company ByteDance and Chinese e-commerce giant JD.com.

About 42X: G42 launched the Shanghai-headquartered tech growth fund in 2022 with an investment of USD 10 bn. The Shanghai office was headed by Jason Hu, the former head of strategic investments at JD.com. Prior to Lunate’s management takeover, 42X Fund was managed by a G42 subsidiary.

REFRESHER- In February, G42 was reported to have already sold all its stakes in all its investments in China — including a USD 100 mn stake in ByteDance — in a bid to reportedly appease US partners, culminating in Microsoft investing some USD 1.5 mn in G42. The second phase of the agreement entails Microsoft exporting large-scale AI components to the UAE, which will require licenses from the US government.

Concerns that the US might pull the plug on the partnership have been swirling for weeks now, with Bloomberg recently saying that Pentagon officials are doubting G42’s commitment to fully divest from China, potentially “imperiling national security.”

It’s unclear whether this move helps address the US’ concerns: The move to transfer ownership of the fund to Lunate could raise concerns that the partnership is not meeting US’ strategic goals, people familiar with the matter told Bloomberg.

Lunate and G42 are both under IHC’s wing: Private markets-focused Lunate is owned by International Holding Company (IHC), a USD 239 bn conglomerate headed by National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan. IHC is majority owned by G42’s parent company, Royal Group, a private investment firm owned by Al Nahyan.

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