UAE’s Mubadala Capital raises $322m in first investment fund in Brazil

Mubadala Capital, the asset management subsidiary of UAE-based Mubadala Investment Company (Mubadala), has closed its first fund in Brazil, Brazil Special Opportunities Fund I (BSOF I), with total commitments of $322m.

BSOF I raised capital from a diverse set of global investors, including a leading public pension fund, family offices, corporates, private equity funds and asset managers across North America, Europe, the Middle East and Asia.

The new fund is focused primarily on control positions in mature companies that are facing financial or legal distress, but which have strong underlying business fundamentals.

This approach enables BSOF I to acquire businesses at attractive entry prices, creating a margin of safety at the closing of the transaction that reduces BSOF I’s dependency on Brazil’s economic cycles including currency depreciation while retaining the upside exposure associated with a growing economy.

The Abu Dhabi-headquartered Mubadala Capital manages over $10bn of assets in third-party managed funds across its Brazil, private equity, public equities and venture capital businesses, and Mubadala was reportedly the first sovereign wealth fund to manage third-party capital on behalf of other institutional investors.

“We began investing in Brazil almost 10 years ago and over that time we have built a highly talented team with a differentiated approach to the market underpinned by maximising upside while simultaneously mitigating risk. The closing of BSOF I represents a major milestone for the Brazil team and for Mubadala Capital,” said Oscar Fahlgren, head of the Brazil strategy at Mubadala Capital.

In November, Brazil President Jair Bolsonaro visited the UAE. During his visit to Dubai, several MoUs were signed including a partnership between the Emirates Center for Strategic Studies and Research (ECSSR) and the Alexandre de Gusmão Foundation (FUNAG); and an MoU between the UAE Ministry of Education and Brazilian Ministry of Education.

In 2021, total UAE assets in Brazil surpassed $10bn, while 30 Brazilian companies operated in the UAE. Brazil also plans to double the value of its bilateral trade with the UAE to $5.6bn in the next five years.