Mubadala Capital Chases ‘Complexity' Post Clear Channel Deal

(Bloomberg) -- Mubadala Capital is embracing a more aggressive stance on dealmaking, wading into complicated transactions shunned by the titans of private equity and participating in multibillion-dollar buyouts that many other sovereign investors typically avoid. The alternative asset management arm of wealth fund Mubadala Investment Co. this week agreed to buy billboard firm Clear Channel Outdoor Holdings Inc. and pledged to commit $3 billion of new equity to the business. A top executive said the fund will continue to seek out such transactions. “We’re looking for large, complex deals, where we can unlock the complexity and generate alpha for our investors,” Chief Investment Officer Oscar Fahlgren said in an interview. “The Clear Channel deal is a good example of that and going forward, you will continue to see us looking at situations that are similar.” The deal values Clear Channel at $6.2 billion, including borrowings. The firm boasts a stable of attractive assets, though it has been hamstrung by high levels of debt — more than $5 billion, according to data compiled by Bloomberg. For Mubadala Capital, the buyout exemplifies the kind of dealmaking that sets it apart from both its parent and the $1 trillion Abu Dhabi Investment Authority. While those funds typically participate in minority investments, Mubadala Capital has taken a different approach. It brought out the elephant gun in late 2024, acquiring Canadian mutual fund manager CI Financial Corp. in one of the largest-ever privatizations by an Abu Dhabi entity in the financial sector. That came just a few months after it had closed the purchase of Fortress Investment Group. “For most big buyout funds today, complexity in transactions is not an ideal scenario,” Fahlgren said. “We embrace complexity and go deep on such situations to create long-term value. That differentiates us from the rest.” $2 Trillion City Mubadala Capital manages, advises and administers more than $430 billion in assets. It’s overseen by Hani Barhoush, a former Merrill Lynch banker who’s helmed the fund since inception and is also head of the credit and special situations platform at Mubadala Investment. In all, the fund has a team of over 200 professionals spread across offices in Abu Dhabi, New York, London, San Francisco and Rio de Janeiro. Set up in 2011, Mubadala Capital is among a swathe of Abu Dhabi entities that collectively oversee assets worth about $2 trillion, a landscape that’s seen sweeping changes of late. L’imad Holding Co. — chaired by the emirate’s crown prince Sheikh Khaled bin Mohammed — absorbed wealth fund ADQ last month, while Abu Dhabi’s biggest listed firm, International Holding Co., created a new financial-services holding company overseeing about 870 billion dirhams ($237 billion) on Friday. Over the years, Mubadala Capital has made a series of moves that help differentiate itself from the city’s sovereign wealth apparatus. The fund pioneered the idea of managing external capital for global institutional investors, an approach since embraced by others in Abu Dhabi. And it has twice sold pieces of itself to external investors, a rarity among sovereign investors. The most recent such deal came last year, when TWG — the investment firm led by Guggenheim Partners founder Mark Walter and financier Thomas Tull — bought a stake. The two are partnering on the Clear Channel deal. “In a way, we like to think of ourselves as specialized generalists,” Fahlgren said. “We are not looking for auction processes and we do not think buying assets from other buyout firms in the market is going to create value in the long-term.” “We’re looking for opportunities in areas where others don’t play that much,” he added. Get the Mideast Money newsletter, a weekly look at the intersection of wealth and power in the region. (Updates to add details on new Abu Dhabi entities in paragraph 11.) More stories like this are available on bloomberg.com