SoftBank Sells Fortress Stake to Mubadala, Management Team

Abu Dhabi sovereign wealth fund Mubadala Investment Co. and Fortress Investment Group agreed to buy 90% of the equity held by Japanese conglomerate SoftBank Group Corp. in the US asset manager.

(Bloomberg) — Abu Dhabi sovereign wealth fund Mubadala Investment Co. and Fortress Investment Group agreed to buy 90% of the equity held by Japanese conglomerate SoftBank Group Corp. in the US asset manager.

Mubadala will own 70% of the equity in Fortress, while Fortress management will hold a 30% equity interest and a class of equity entitling it to appoint a majority of seats on the board, the firms said on Monday.

Fortress will continue to operate as an independent investment manager after the deal closes. Drew McKnight and Joshua Pack will become co-chief executive officers and Pete Briger will be named chairman.

The companies didn’t disclose terms. Bloomberg News has reported that a deal that could potentially value the company at more than $2 billion.

Buoyed with cash from last year’s commodity boom, Abu Dhabi — one of few cities globally to manage over $1 trillion in sovereign wealth — is seeking to extend its influence on the global stage, investing billions of dollars to diversify its economy away from crude.

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SoftBank acquired Fortress in 2017, intending to use the New York-based firm’s expertise to help manage its Vision Fund. Mubadala has long been a SoftBank counterpart and emerged as one of the anchor investors in that fund.

Bloomberg first reported Mubadala’s talks with SoftBank in July. Rajeev Misra, an important lieutenant to SoftBank founder Masayoshi Son with close ties to the Gulf emirate, was playing a key role in brokering the deal, people familiar with the matter said at the time.

Ardea Partners served as financial advisors and Shearman & Sterling served as legal counsel to Mubadala. Goldman, Sachs & Co. LLC served as financial advisor and Kirkland & Ellis served as legal counsel to Fortress senior management. The Raine Group served as exclusive financial advisor and Morrison Foerster served as legal counsel to SoftBank.

The transaction is expected to close in the first quarter of next year, subject to approvals.

(Updates with details)

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