Mubadala-Backed Fortress Sees Assets Doubling to $100 Billion - Bloomberg

Mubadala-Backed Fortress Sees Assets Doubling to $100 Billion - Bloomberg

Fortress Investment Group, the firm backed by Abu Dhabi sovereign wealth fund Mubadala, said it expects to double assets under management to $100 billion as it pushes into private wealth and insurance.

“For us to compete with larger firms like Ares, Apollo and Sixth Street, we need to continue to grow assets, because if we don’t then we’ll be less relevant,” said co-Chief Executive Officer Drew McKnight. Fortress aims to be among the first in line to help companies with their capital needs, he said, providing junior debt, preferred equity and structured equity, among other things.

“Increasingly we hear from limited partners that they want to have fewer relationships,” McKnight said in an interview. “We feel like we’re in a pretty good spot.”

Buoyed by the allure of permanent capital, several alternative-asset managers, including Apollo Global Management Inc. and KKR & Co., have made a push to tap pools of insurance assets. Many have also built businesses to tap high-net-worth individuals who are increasingly interested in private markets.

McKnight was joined in the interview by co-CEO Joshua Pack, who said Fortress expects to reach the $100 billion threshold within five years — up from about $49 billion at the end of March — “based on conversations we’re having with limited partners and the demand we’ve seen.”

Fortress won’t let fundraising distract from its mission to deliver superior returns for investors, McKnight said.

“There’s a path where we can actually create a better product for our limited partners by having more access to capital and being more relevant,” he said.

Pack, who joined the firm in 2002, and McKnight, who followed three years later, both witnessed the alternative-asset manager’s transition from closely held firm, through its 2007 initial public offering, to its take-private a decade later by Masayoshi Son’s SoftBank Group Corp.

Last month, Fortress management and Mubadala completed the acquisition of 90% of the equity of Fortress that had been held by SoftBank. The co-CEOs are calling the firm’s latest incarnation “Fortress 4.0.”

It’s the first time that management has broadly owned a significant part of the firm, with more than 150 Fortress staffers holding a 32% stake. Co-Chairman Pete Briger and managing partners Pack, McKnight and Jack Neumark are the largest individual investors, and all wrote checks as part of the deal. Additional Fortress employees can become shareholders over time through an incentive program.

Unlike certain direct-lending rivals that have pursued bank partnerships to bolster origination pipelines, McKnight said the firm has ample flow.

While Mubadala is represented on Fortress’s board by Hani Barhoush and Antoun Ghanem, McKnight stressed that the Abu Dhabi firm has no preferred economics.

“They’re paying the same fees as everyone else when they invest in our funds,” McKnight said. “We are eyes-wide-open that they are invested with virtually all of our competitors, but we also think if we’re going to have capital partners, they’re about as strategic as it can be.”

Fortress, which counts North America, Western Europe, Japan and Australia as core geographies, plans to open an office in Abu Dhabi, Pack said. Investment professionals including intellectual-property head Eran Zur will spend time there, as will Harry Steel, a managing director within the firm’s capital-formation group.

The firm’s leaders haven’t ruled out another IPO down the road.

“Anything’s on the table,” Pack said, “but it is one step at a time, and we are focused on everything we want to do in the near-term.”

ADIA Weighs €1 Billion Investment in Nestle Ice Cream Venture - Bloomberg

ADIA Weighs €1 Billion Investment in Nestle Ice Cream Venture - Bloomberg

Abu Dhabi’s biggest sovereign wealth fund is considering investing at least €1 billion ($1.1 billion) in Nestle SA’s ice cream joint venture, which includes brands like Haagen-Dazs, according to people familiar with the matter.

The Abu Dhabi Investment Authority, which controls almost $1 trillion of assets, is working with advisers as it considers committing fresh capital to Nestle’s Froneri ice cream venture with buyout firm PAI Partners, the people said.

A deal would help PAI hold onto its Froneri stake for longer and could value the business at $10 billion or more, according to the people. PAI has been seeking new investors for a so-called continuation fund that would help it extend the lifespan of its investment in Froneri, Bloomberg News has reported.

No final agreements have been reached with ADIA and other investors could also emerge to back Froneri, the people said, asking not to be identified because the information is private. Representatives for ADIA, Nestle and PAI declined to comment.

Buyout firms increasingly have turned to continuation vehicles to deal with a backlog of investments as dealmaking has slowed over the past couple of years. PAI this year started exploring strategic options for Froneri, including a possible stock market listing.

Froneri competes with Unilever Plc’s ice cream unit. That business has drawn initial interest from buyout firms including Advent International, Blackstone Inc., Cinven and CVC Capital Partners Plc, Bloomberg News reported on Friday.

ADIA has emerged as one of the most active investors in the private equity industry in the last few years, providing capital to some of the sector’s largest deals. The wealth fund teamed up with investors including CVC on a potential transaction to take Hargreaves Lansdown Plc private for about £5.4 billion ($7 billion). It’s also among investors backing CVC in its bid for Deutsche Bahn AG’s logistics unit DB Schenker, which could be valued at about €15 billion or more.

PAI bought UK-based R&R Ice Cream in 2013 from Oaktree Capital Management and other investors. In 2016 it combined that business with part of Nestle’s ice cream empire to create Froneri.

Most Gulf markets gain on positive earnings; #Saudi eases | Reuters

Most Gulf markets gain on positive earnings; Saudi eases | Reuters

Most stock markets in the Gulf ended higher on Tuesday, helped by positive corporate earnings, while investors watched for further signs that the U.S. Federal Reserve might start to cut interest rates as soon as September.

Dubai's main share index (.DFMGI), opens new tab advanced 0.9%, with top lender Emirates NBD (ENBD.DU), opens new tab rising 0.9%, while Emirates Integrated Telecommunications (DU.DU), opens new tab closed 1.7% higher, following a sharp rise in second-quarter earnings.

Saudi Arabia's benchmark index (.TASI), opens new tab dropped 0.6%, extending losses from the previous session, with aluminium products manufacturer Al Taiseer Group (4143.SE), opens new tab losing 2.7%, and oil giant Saudi Aramco (2222.SE), opens new tab retreating 1.1%.

Oil prices - a catalyst for the Gulf's financial markets - dipped as growing expectations of a ceasefire in the war in Gaza weighed on prices, more than offsetting news of a potential September interest-rate cut in the European Union that supported sentiment.

In Abu Dhabi, the index (.FTFDGI), opens new tab dropped 0.5%, ending a six-session winning streak.

The United Arab Emirates hopes to reactivate trade talks with the European Union by the end of the year, the UAE trade minister said on Monday, and is optimistic the talks would be bilateral.

The Qatari benchmark (.QSI), opens new tab added 0.2%, with the Gulf's biggest lender Qatar National Bank (QNBK.QA), opens new tab gaining 0.3%.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab finished 0.7% higher, led by a 0.7% increase in top lender Commercial International Bank (COMI.CA), opens new tab.

On Sunday, the lender said second-quarter net profit rose by 96% year-on-year to 15.6 billion Egyptian pounds ($322.91 million).

Egypt reduced its external debt by $14 billion in the five months to end-May, the sharpest such decline in the country's history, a statement released on Monday by Egypt's press centre said.

Most major Gulf markets gain as investors eye earnings | Reuters

Most major Gulf markets gain as investors eye earnings | Reuters

Most major stock markets in the Gulf rose in early trade on Tuesday, helped by positive earnings, while investors watched for further signs that the U.S. Federal Reserve might start to cut interest rates as soon as September.

Dubai's main share index (.DFMGI), opens new tab gained 0.4%, with blue-chip developer Emaar Properties (EMAR.DU), opens new tab rising 0.8%, while Emirates Integrated Telecommunications (DU.DU), opens new tab advanced 1.5%, following a sharp rise in second-quarter earnings.

In Abu Dhabi, the index (.FTFDGI), opens new tab added 0.1%.

The United Arab Emirates hopes to reactivate trade talks with the European Union by the end of the year, the UAE trade minister said on Monday, and is optimistic the talks would be bilateral.

Saudi Arabia's benchmark index (.TASI), opens new tab dropped 0.4%, with aluminium products manufacturer Al Taiseer Group (4143.SE), opens new tab losing 0.9% and the country's biggest lender Saudi National Bank (1180.SE), opens new tab was down 1.2%.

Elsewhere, oil giant Saudi Aramco (2222.SE), opens new tab eased 0.5%.

Crude prices - which hit a one-month low on Monday - steadied, as investors remained cautious amid expectations of plentiful supplies and weak demand, while brushing off the U.S. presidential campaign upheaval.

The kingdom's economic growth will likely be one of the slowest among the Gulf Cooperation Council countries this year, according to a Reuters poll of economists who lowered growth forecasts from three months ago due to extended oil output cuts.

Among other losers, telecoms firm Etihad Etisalat Co (7020.SE), opens new tab lost 0.6%, despite reporting a rise in quarterly net profit.

In Qatar, the index (.QSI), opens new tab added 0.1%, helped by a 0.4% rise in the Gulf's biggest lender Qatar National Bank (QNBK.QA), opens new tab.