Abu Dhabi’s newest wealth fund prepares to court outside investors

The latest:

L’imad Capital is being shaped into a global investment vehicle that would back private equity and other funds while doing deals directly, people familiar with the matter told Bloomberg. The unit intends to build a track record first through direct investments, co-investments and partnerships, and could raise outside money for the first time as early as next year, one person said. No final decisions have been taken.

Details:

• The parent: L’imad Holding is the emirate’s newest sovereign wealth fund, overseeing about $300 billion in assets and chaired by Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed Al Nahyan, with Jassem Al Zaabi as chief executive. Bloomberg reported the fund is itself undergoing an overhaul of its structure.
• The new shape: Under the proposed structure, the wealth fund would sit at the top like a holding company with stakes in major Abu Dhabi firms, while L’imad Capital would operate more like a buyout firm, one person familiar said. Its deals could either support portfolio companies or chase returns for the holding company.
• The hiring push: L’imad Capital has shortlisted chief executive candidates with backgrounds in private equity, infrastructure and private credit, people familiar with the process said, without naming them. Several other senior appointments are expected over the coming months.
• No comment: Representatives for L’imad Capital did not respond to requests for comment, and the people describing the plans declined to be identified because the discussions are confidential. The timing of any first fundraise, its target size and the investor base being courted have not been disclosed.
• The scale around it: Abu Dhabi’s investment landscape rests on entities holding roughly $2 trillion in sovereign wealth, which have kept transacting through disruptions caused by the regional war, according to Bloomberg. L’imad Holding has carved out a niche by targeting investments that advance the emirate’s strategic priorities.
• The precedents: Mubadala Capital opened to outside investors after more than a decade building a record, and has set up a venture to raise third-party capital at home for the first time. MGX has pulled in nearly $50 billion from regional wealth funds, global pension funds and other institutions for artificial intelligence bets.
• Recent deals: L’imad last month announced plans to take Abu Dhabi Ports Co. private, handing the government tighter control of a logistics group spanning ports, maritime services and economic zones. It is also among the parties circling an aviation business run by Apollo Global Management, Bloomberg reported.
• The partnerships: In May, the fund joined BlackRock’s Global Infrastructure Partners, Singapore’s Temasek Holdings and Abu Dhabi National Oil Co. in a venture targeting $30 billion of infrastructure projects. It also backed Paramount Skydance’s bid for Warner Bros. Discovery late last year alongside other Middle Eastern investors.
• The ADQ absorption: L’imad’s profile widened in January when Sheikh Khaled became chairman and the fund absorbed sovereign investor ADQ. That brought in holdings ranging from a stake in Sotheby’s to Abu Dhabi’s flagship airline and other marquee local assets.

Between the lines:

The Apollo aviation interest and the Abu Dhabi Ports privatization point the same way: logistics and transport, which Bloomberg links to the emirate’s search for alternatives to the Strait of Hormuz. Mubadala Capital’s decade-long track-record build is the template L’imad Capital is following, which is why the fundraise is being staged behind direct deals and hires rather than launched cold.

What’s next

Watch for the chief executive appointment and the senior hires expected over the coming months, the completion of the Abu Dhabi Ports take-private, and any outcome in the Apollo aviation process.