TWG, Mubadala Capital tie up in multi-bn USD investment pact: US-based investment firm TWG Global, which is led by Guggenheim Partners Founder Mark Walter and financier Thomas Tull, acquired a 5% stake in Mubadala Capital for USD 2.5 bn, according to a statement. TWG also has an option to increase its stake as the partnership evolves, a Mubadala spokesperson told Bloomberg. In return, Mubadala Capital will anchor a USD 10 bn syndicated investment in TWG—part of the latter’s larger USD 15 bn equity raise.

REMEMBER- This marks only the second time ever that Mubadala Capital has taken on outside equity investors. The first was during its 42% stake in Silver Rock Financial, which brought in three new equity owners: Silver Rock CEO Carl Meyer, Co-founder Michael Haberkorn, and M-Cor Capital, the investment arm of the Milken Family Office. Sovereign wealth funds—especially those based in the UAE—rarely give up equity, making this transaction with TWG a rare move in an otherwise tightly held space.

Where’s the money going? TWG plans to deploy the fresh capital into proprietary investment opportunities, TWG’s Mark Walter said. “We are strengthening our joint abilities to access and scale high-quality investment opportunities globally,” said Mubadala Capital CEO Hani Barhoush.

What’s next? TWG and its partners are eyeing an additional USD 20 bn in long-term capital commitments to deepen the partnership.

SOUND SMART- The landmark transaction is also an indicator of a change in dynamics between sovereign wealth funds and private equity firms — which were historically straightforward: Private equity firms would raise funds from SWFs, who acted as limited partners. The reversal is a sign that SWFs are shedding their roles as passive investors chasing returns, and turning into “dynamic builders of asset management empires,” Global SWF said in a note commenting on the transaction.

The acquisition also gives Mubadala exposure to a host of assets in the sports and leisure sector: TWG Global’s portfolio includes the LA Dodgers, Lakers, and Chelsea FC, as well as stakes in Guggenheim Investments and Palantir-related AI ventures. Mubadala itself has been investing in sports assets for a while, including in US-based sports broadcaster YES Network, through its MIC Capital Partners Fund III. It was also in talks to buy a stake in Brazilian soccer league Libra a few years back.

Tags: