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An arm of Abu Dhabi’s sovereign wealth investor has raised almost $1bn for its third Brazil fund, despite concerns that the war in the Middle East will cause Gulf states to review overseas investments.
Mubadala Capital said it had provided an anchor sum of $250mn to the vehicle, which garnered total commitments of about $900mn, and secured the rest mostly from international clients including pension schemes, family offices and private capital funds.
The fundraise overshot an initial target of $750mn, with about a third already invested into assets including a gym chain, the Rio metro, a toll road and a medical university, Mubadala Capital said.
The move shows how the asset management subsidiary of Mubadala is doubling down on Latin America’s largest economy just as the Gulf region has been dragged into the conflict sparked by US and Israel attacking Iran late in February.
Mubadala Capital’s chief investment officer Oscar Fahlgren told the FT: “The world is in a very complicated state right now, with [the] Russia war, the Middle Eastern war and the prospects or the risks of potential global recession.
“Brazil is at least starting to look like a pretty interesting destination,” he added.
The company is already a big foreign investor in Brazil, with $7.3bn deployed in activities including biofuels production, a top Burger King franchisee and ownership of the organiser of Formula 1’s São Paulo Grand Prix. It typically buys controlling stakes in companies facing distress.
As the Iran conflict wreaks damage on energy and other infrastructure across Gulf states, officials have suggested governments in the region may reassess their overseas investments. But Fahlgren said Mubadala Capital had no plans to shift investments towards its home region.
The money manager, which advises on and administers $430bn in assets, said the war had not led to a reduction in the amount it was providing towards the new fund, nor a delay in the close of the fundraising.
“We continue to see a very strong backing from our parent. We haven’t seen any effects of the current turmoil on its commitment towards our products or our investment, in this case the Brazil fund,” Fahlgren said.
“We’re not going to redirect capital to the Middle East . . . [But] if we see a market opportunity to raise a fund that could contribute or explore opportunities in the Middle East, that’s certainly something we could consider.”
Mubadala, the parent group, entered Brazil in 2012 with financial backing for former tycoon Eike Batista, once one of the world’s wealthiest people, before his energy and commodities empire collapsed the following year.
Mubadala Capital has managed third-party capital in the country for about a decade, raising $322mn for a country-specific fund in 2022 and $710mn for another in 2023.
Fahlgren said a recent string of Brazilian companies entering bankruptcy protection or out-of-court debt restructurings presented potential opportunities. The company was also exploring expansion in other Latin American countries, he added.
