Mubadala, Temasek units pair up for co-investments
Mubadala Capital’s recent tie-up with Singapore-based asset manager Seviora adds to the growing list of tie-ups and investments between institutional investors in the Middle East and Asia.
The investment management arm of the Middle East sovereign wealth fund Mubadala -- an active investor in Asia Pacific -- and Temasek-owned Seviora inked a memorandum of understanding (MoU) to explore co-investment opportunities and other strategic initiatives.
“We are exploring a wide range of opportunities across various asset classes and sectors globally,” a spokesperson for Mubadala Capital told AsianInvestor, without offering any other details.
Mubadala Capital manages approximately $23 billion in assets, combining its balance sheet investments with third-party capital.
This includes four flagship private equity funds, a series of co-investment vehicles, special purpose vehicles and continuation funds, among other investment vehicles.
DEEPENING PARTNERSHIP
Seviora echoed Mubadala’s point of view, noting that the partnership will scout for opportunities across sectors globally, including Singapore, more broadly in Asia and the UAE (where Mubadala is headquartered).
The partnership has no specified duration or timeline, and “there are no defined financial commitments at this time,” a spokesperson from Seviora told AsianInvestor.
“We have known Mubadala Capital for a long time,” the spokesperson said.
“Our respective teams have engaged with each other on several occasions. We are very pleased that our relationship with Mubadala Capital will be further deepened by this MoU.
“The UAE, and more broadly, the GCC, is an important and growing market for us, and we see many compelling opportunities in the region,” the spokesperson added.
The Middle East's growing interest in the Asia Pacific has attracted institutional investors to both Hong Kong and Singapore.
“Trade ties between the Middle East and Asia are strong and investors in both regions have begun to re-evaluate global asset allocations,” the Seviora spokesperson added.
ACTIVE INVESTOR
Mubadala, the parent of Mubadala Capital, has been particularly active in the region.
It is aiming to roughly double its exposure to Asia – to about 25% from 12% of total AUM -- media reports said earlier this year.
The sovereign investor, which has $302 billion in assets under management, in February signed a $1 billion separately managed account with Goldman Sachs Alternatives under which both sides will co-invest in private credit opportunities throughout the Asia Pacific.
It signed a similar deal with alternatives giant KKR in October 2022.
Mubadala also made a cornerstone investment in PAG’s Asia Pacific renewable energy platform (PAG REN I), primarily focused on supplying solar power to corporations across Japan, in May.
ASIA APPEAL
Middle Eastern investors are increasingly looking to diversify their portfolios beyond traditional investments and move away from oil-based revenues.
Cross-border investment activity from the Middle East to Asia has gained momentum, with total cross-regional private capital deal value cumulatively reaching $83 billion between 2020 to 2023, compared to $14 billion from 2016-2019, according to a February 2024 report by Global Private Capital Association.
Entities from the UAE and Saudi Arabia, in particular, are leading the investment push in Asia.
"Gulf sovereign wealth funds (SWFs) are increasing direct dealmaking across Asia, seeking more control and diversified exposure, while maintaining partnerships with select top-performing managers.
"Standalone LP [limited partner] direct deals have accounted for 39% of capital deployed in all Asia private capital deals that include a Middle East investor,” the report noted.
Apart from Mubadala, another big Middle East investor in the region is Saudi Arabia’s Public Investment Fund (PIF).
It became an anchor investor in an ETF tracking Saudi Arabian equities that was launched in late 2023 on the Hong Kong Stock Exchange.
More recently, it inked an MoU with Hong Kong Monetary Authority to jointly develop and anchor a $1 billion investment fund to help companies with a Hong Kong or Greater Bay Area connection to expand into the Middle East.
PIF was the leading private markets investor globally in 2023, according to Global SWF, a SWF tracker, with $31.5 billion deployed in 48 deals, 33% more than in 2022.