1. News
July 25, 2023

Mubadala’s takeover of Fortress Investment faces security probe in US

At the time of signing the deal, the US-based investment firm was managing $46bn of assets on behalf of over 1,900 institutional investors as well as private clients

US national security officials are reportedly examining UAE-based sovereign investor Mubadala Investment’s takeover of Fortress Investment Group.

Mubadala Investment signed definitive agreements in May 2023 to buy the remaining 90.01% stake it previously didn’t own in the US-based investment manager from SoftBank Group.

The terms of the deal were not revealed by the parties.

The scrutiny from the security officials has come amid concerns in the US over UAE’s ties with China, reported Financial Times citing sources with knowledge of the matter.

According to the business newspaper, a review by the Committee on Foreign Investment (CFIUS) in the US is in its early stages and a decision is not expected for several months.

Upon the closing of the transaction, Fortress Investment Group’s management will hold a 30% equity interest in the company and own a class of equity.

Besides, Mubadala Capital, a fully-owned asset management subsidiary of Mubadala Investment, will own 70% of Fortress Investment Group’s equity. Currently, Mubadala Capital has a 9.99% stake in Fortress Investment Group.

The parties are aiming to complete the transaction in Q1 2024.

At the time of signing the deal, the US-based investment firm was managing $46bn of assets on behalf of over 1,900 institutional investors as well as private clients.

Fortress Investment Group is expected to benefit from Mubadala Capital’s global network and extensive portfolio of diverse assets and access to proprietary investment opportunities to support the former’s growth and expansion.

A spokesperson for Mubadala Investment has been quoted by Reuters, as saying: “We have applied for CFIUS review which is standard, and have begun the process of working with the appropriate regulatory officials as we have in the past.”