Abu Dhabi’s sovereign wealth fund Mubadala has taken a stake in US private equity group Silver Lake and said it is backing a new longer-term investing strategy from the firm with a further $2bn.
The tie-up underscores the growing relationship between Mubadala’s head Khaldoon Al Mubarak and Silver Lake’s Egon Durban, who last year took over as co-chief executive of the US firm, which has built a reputation as one of the world’s biggest technology investors over past two decades.
As part of the deal announced on Wednesday, Silver Lake is launching a new investment strategy that extends beyond the typical 10- to 12-year private equity horizon. With a 25-year time horizon, the firm said it would have “significant added flexibility for Silver Lake to capitalise on a wide range of investment opportunities, including those outside the mandates of our existing funds”.
Mubadala said it was acquiring the stake in Silver Lake from Dyal Capital Partners, a unit of US asset manager Neuberger Berman, that purchased a holding of less than 10 per cent in the technology-focused investor in 2016. The firms did not disclose how much the Abu Dhabi fund paid for the stake.
The transactions build on the relationship formed by Mr Al Mubarak and Mr Durban. Last year, Silver Lake acquired a 10 per cent stake in the parent company behind the English Premier League club Manchester City in a $500m deal that broke records for sports valuations. That company, City Football Group, is controlled by Abu Dhabi and Mr Al Mubarak is its chairman.
In a statement on Wednesday, Mr Al Mubarak said “our goal is to be well positioned to take advantage of this accelerated digital transformation and its potential, and we believe Silver Lake is the right partner”.
With about $230bn in assets, Mubadala is one of the Gulf’s most active sovereign wealth funds. The fund and Silver Lake said they had worked together on investments including India’s Jio Platforms.
Mubadala has also placed $15bn in SoftBank’s $100bn Vision Fund, which was launched in 2017, but has so far not made any public commitments to invest in a sequel fund led by the Japanese group.