Abu Dhabi’s sovereign wealth fund has acquired a stake in US private equity group, Silver Lake, committing US$2 billion to a new investment strategy designed to make longer term investments.
The equity minority stake was purchased from Dyal Capital Partners, a unit of US asset manager Neuberger Berman, which had purchased a 10% stake back in 2016. It was not disclosed how much Mubadala paid for its share in the business.
Silver Lake has developed a reputation as a technology investor and the alliance is part of a growing bond between the two heads of the respective companies – Khaldoon Al Mubarak of Mubadala and Egon Durban of Silver Lake, who became co-chief executive in 2019.
Durban has also been instrumental in many of the high-profile investments made by Silver Lake in the last six months, injecting billions into online brands like Airbnb and Expedia and Alphabet’s autonomous car unit, Waymo.
The new investment strategy developed by Silver Lake along with a $2 billion capital injection from Mubadala will have a 25-year investment horizon, twice as long as the usual 10 to 12-year horizon for private equity funds.
“The creative structure of this new strategy provides significant added flexibility for Silver Lake to capitalise on a wide range of investment opportunities, including those outside the mandates of our existing funds,” stated Durban and co-chief executive, Greg Mondre.
Meanwhile Mubadala’s Al Mubarak added: “Technology is the bedrock of the global economy, and fundamental to all other sectors that are being significantly digitalised. Our goal is to be well positioned to take advantage of this accelerated digital transformation and its potential.”
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