Apollo Enters Mubadala Capital with Nearly 10% Stake and $5 Billion Commitment

Apollo Global Management is buying a minority stake in Mubadala Capital, the alternative asset management arm of the UAE sovereign fund Mubadala, in a deal announced on Monday. A person familiar with the matter said the stake is close to 10%, while Apollo declined to confirm its size, according to a Reuters report published by Zawya.

Mubadala Capital stated that Apollo and other strategic investors will become minority shareholders and are expected to commit a total of $5 billion to the firm's strategies upon the deal's first close. It confirmed that Mubadala Investment Company will remain the majority shareholder, with the deal expected to close in the fourth quarter of this year, subject to regulatory approvals.

The company explained that Apollo's investment will help it expand its investor base, launch new strategies, and capture global opportunities, noting that it will continue to operate independently and maintain its governance structure after the transaction completes. The move comes as global investment firms expand in the Gulf seeking partnerships with major sovereign wealth funds, with Abu Dhabi funds alone managing an estimated $1.8 trillion in assets.

Mubadala managed $385 billion in assets at the end of last year, being one of the funds increasing its exposure to alternative investments. Last year, Mubadala Capital entered into a $1 billion strategic partnership with U.S. firm Fortress to invest in private credit, following earlier partnerships with Goldman Sachs and Apollo. John Zito, co-president of Apollo Asset Management, said Mubadala is a trusted partner in establishing and expanding several of the firm's strategies, and that the investment reflects confidence in Mubadala Capital's business.

What Do These Terms Mean?

Minority Stake: A portion of a company's shares that does not grant its owner control over its decisions, but allows participation in profits and access to management insights.

Strategic Investor: An investor who buys a stake aiming to benefit from a long-term business partnership, rather than seeking quick profits from trading the stock.

Alternative Assets: Investments outside traditional stocks and bonds, such as private funds, real estate, and private credit, featuring distinct risk and liquidity profiles.

Private Credit: Financing provided by non-bank funds or institutions to companies in exchange for a return, outside of traditional bank loans and public bond markets.