Abu Dhabi's Mubadala and Barings form financing platform for European markets

Barings Mubadala Enterprise, along with its capital partners, plan to provide $3.5bn in financing to businesses over the next 18 months

"Mubadala has a long history of establishing strong, value-creating partnerships with leading global organisations," Mubadala's deputy chief executive, Waleed Al Muhairi, says.

Barings, a global financial services firm, has partnered with Abu Dhabi's Mubadala Investment Company to set up a new platform to provide funding to mid-market European companies.

The new entity, Barings Mubadala Enterprise (BME), will look to provide up to $3.5 billion (Dh12.84bn) in financing over the next 18 months to help meet demand from European corporates for flexible capital, Mubadala said in a statement on Tuesday.

The Abu Dhabi-based entity is also the cornerstone investor in a $12bn private credit platform focused on large-scale direct lending rolled out by Apollo Global Management in July.

"Mubadala has a long history of establishing strong, value-creating partnerships with leading global organisations. The partnership with Barings, through the establishment of BME, is very consistent with this approach,” Waleed Al Muhairi, Mubadala’s deputy group chief executive head of Alternative Investments & Infrastructure business, said.

“BME will draw from the experience and global network of Mubadala and the deep expertise from Barings to deliver value to all stakeholders.”

BME will focus particularly on opportunities in the United Kingdom, France, Benelux and the Nordics, it said.

Mubadala will invest alongside Barings and its parent MassMutual, along with other partners. The evergreen fund will focus on senior secured loans, the statement said.

“This partnership will leverage our significant capabilities in origination and alternative credit to help strategic capital partners such as Mubadala invest with scale," Barings chairman and chief executive Tom Finke said.

The initiative continues to build on Barings’ base of long-term, strategic partnerships and its position as a leading institutional capital provider across the European middle-market landscape, according to the statement.

Barings, a money manager with $346bn in assets under management as of June 30, provides investment opportunities across public and private capital markets, through active asset management and direct origination. The firm is active in North America, Europe and Asia Pacific.

Mubadala Capital, the financial investment arm of Mubadala, operates across six businesses, including private equity, public equities, ventures capital and credit and some sovereign investment partnerships. It invests globally in both public and private securities.

The company has made investments in excess of $25bn. It has three private equity funds, two early stage venture funds, a hedge fund, in addition to a Brazil-focused investment business.

Separately on Tuesday Mubadala Investment Company and Sberbank, the largest bank of Eastern and Central Europe, signed a strategic agreement to explore co-investments, debt and equity financing opportunities. This is in addition to exploring long-term financing of Mubadala projects in Russia and other territories, advisory services, hedging and credit risks.

The agreement paves the way for potential cooperation and investment in areas such as AI, cybersecurity, life sciences, venture capital, Islamic finance, telemedicine and education, Mubadala said in a statement.

"We're pleased to formalise our relationship with Sberbank and establish a new and exciting platform to unlock investment and financing opportunities in Russia and the UAE," said Khaldoon Al Mubarak, group chief executive and managing director of Mubadala. “We've successfully invested in Russia over the last decade, and with the establishment of Mubadala's Moscow office last year coupled with today's new partnership with Sberbank, we are in a position to further broaden our presence in Russia.”

Sberbank aims to have a presence in Abu Dhabi by the end of 2020. It will promote investment activity by implementing projects of the bank’s clients in conventional and Islamic finance.

“We are becoming pioneers in financial collaboration between Russia and the UAE and are confident that the horizons of this partnership will continue to expand," said Herman Gref, chief executive and chairman of Sberbank.