Abu Dhabi, UAESaturday 20 July 2019

Mubadala keeps options open for exits and private equity partners

Exits could be private sales or IPOs, deputy group chief executive said

Waleed Al Muhairi said Mubadala is actively seeking investments in disruptive industries. Leslie Pableo / National
Waleed Al Muhairi said Mubadala is actively seeking investments in disruptive industries. Leslie Pableo / National

Mubadala Investment Company, Abu Dhabi’s strategic investment arm, is keeping its options open when exiting from its investments and would not shy away from taking on private equity partners as part of the process, a senior company executive said.

“Usually when we think values [of assets] have reached our internal targets and it’s the right time, we consider an exit,” Waleed Al Muhairi, deputy group chief executive of Mubadala said on Wednesday at Bloomberg Invest conference in Abu Dhabi.

“Exits could take place in many different forms – public process as an initial public offering or [a] private sale ... there are many different ways involved in-between.”

The firm, with more than $225 billion (Dh826bn) under management, agreed this week to sell a significant minority interest in its fully owned Spanish oil and gas firm, Compania Espanola de Petroleos (Cepsa), to US-based Carlyle Group, one of the top global private equity players. Mubadala will remain the majority shareholder of Cepsa under the deal, while Carlyle Group will acquire between 30 and 40 per cent, Mubadala said on Monday. The deal puts the entire enterprise value of Cepsa at $12bn, according to Mubadala, which did not disclose the exact size of the transaction.

The Abu Dhabi firm had first considered selling a stake in Cepsa, Europe’s biggest privately-owned fully integrated energy company, through a public float last year but shelved the plans due to volatile market conditions at the time.

The 90-year-old Cepsa has worked in partnership with Abu Dhabi for many years. It was originally an investment of Ipic, which became part of Mubadala in a merger in 2017. Mubadala has built its stake in Cepsa since and bought shares held by France’s Total in 2011.

Mubadala, which invests on behalf of the Abu Dhabi government, has no “in-house view” on leaning towards private equity deals following the Cepsa transaction, Mr Al Muhairi, who also heads the investment conglomerate’s alternative investments and infrastructure business, said.

“At the end of the day, there are two things when you are exiting an asset. Obviously you want to make sure it should maximise your returns, that’s normal, number two if you are retaining a stake, like we did in case of Cespa where we still own 70 per cent of business … you need to find the best partner who can join you in that journey to create more value over time,” he said.

Last year, he said has been “a marking year” for the company in terms of international expansion. It today has offices in San Francisco, Rio De Janerio, Moscow, New York city and Hong Kong, which reflects the interest the company has for more international investments.

The company, whose assets include Emirates Global Aluminium, the green-energy firm Masdar, the property developer Aldar and a host of other companies at home, as well as stakes in GE, Austria’s OMV, petrochemical firm Borealis, among others, is looking at adding new sectors to its portfolio.

“We always have strategies and point of views about where the world is going. We do have some new small ones [sectors] that are rapidly growing [including] biotech, life sciences, agri-businesses,” he said, adding that the firm is looking for new areas of disruption for potential investments.

Updated: April 10, 2019 05:44 PM