Fortress and Mubadala to acquire SoftBank’s majority stake in US asset manager

Fortress will continue to operate as an independent company

Following completion of the deal, Mubadala Capital will hold a 70 per cent stake in Fortress. Photo: Mubadala

Fortress Investment Group and Mubadala Capital have signed agreements to acquire SoftBank Group’s majority stake in the US asset manager.

Fortress and the asset management arm of Mubadala Investment Company will take 90.01 per cent of the equity that is currently being held by SoftBank, the companies said on Monday.

The financial size of the deal, which is subject to regulatory approvals, was not disclosed. The deal is expected to close in the first quarter of 2024.

Following completion of the deal, Mubadala Capital will hold a 70 per cent stake in Fortress, which manages assets worth nearly $46 billion. It previously held a stake of nearly 10 per cent in Fortress through its private equity funds.

“Fortress is a world-leading investment manager with a proven track record of delivering superior risk-adjusted returns to its investors throughout business cycles,” said Hani Barhoush, chief executive and managing director of Mubadala Capital.

“We have a strong existing relationship with Fortress’s exceptional management team, and are excited to deepen the relationship further in the years ahead based on a strong alignment of vision, while delivering even greater value to our investors.”

Mubadala Capital manages $20 billion of assets across its own balance sheet investments and in third-party capital vehicles on behalf of institutional investors. These include four private equity funds, three early-stage venture funds and two funds in Brazil focused on special situations.

After the latest deal closes, Fortress will continue to operate as an independent investment manager under the Fortress brand, with full autonomy over investment and decision making, personnel and operations, the companies said.

Mr Barhoush will continue to serve on the company’s board.

Fortress’s managing partners Drew McKnight and Joshua Pack will become co-chief executives and the company’s co-founder Pete Briger will be appointed as chairman.

“We are extremely pleased to deepen our relationship with Mubadala, partnering with one of the world’s most sophisticated investors in a transaction that will provide significant long-term benefits to our company, our employees and the clients we serve,” the Fortress executives said.

“We view Mubadala’s further investment as an affirmation of the business model and investment approach we have embraced for more than 20 years.”

Ardea Partners advised Mubadala and Shearman & Sterling provided legal counsel. Goldman Sachs advised Fortress's senior management and Kirkland & Ellis provided legal counsel.

Mubadala Investment Company invested Dh107 billion ($29.13 billion) last year across sectors and received proceeds of Dh106 billion by monetising assets at strong valuations.

The investments were made in sectors including life sciences, renewable energy and digital infrastructure, in line with the company’s strategy to invest in industries shaping the future, Mubadala said last week.

Mubadala, which invests on behalf of the Abu Dhabi government, is at the heart of the emirate’s efforts to diversify its revenue base and generate income from sources other than oil.

The sovereign fund’s investment portfolio spans six continents. It has interests in many sectors and asset classes, including aerospace, information and communications technology, semiconductors, metals and mining, renewable energy, oil and gas and petrochemicals.