General Atlantic, IHC and Abu Dhabi fund team up on investment firm

Private equity firm General Atlantic is teaming up with an Abu Dhabi state fund and the emirate’s largest listed company to launch a new investment group, underlining the continuing pull the oil-rich Gulf state holds for Wall Street.

The new investment firm will manage a series of assets drawn from ADQ, Abu Dhabi Growth Fund and International Holding Company, a once small company that now dominates the emirate’s stock exchange after four years of explosive share price growth.

In a statement on Monday, ADQ and IHC said that the firm is expected to manage money that they, as well as another sovereign fund ADG, had earmarked for alternative assets, including private equity, venture capital and credit.

The plan “demonstrates our intention to create the largest independent alternative investment manager from the region,” said Mohamed Alsuwaidi, ADQ’s chief executive.

General Atlantic, which has previously invested in tech companies including Alibaba and Airbnb, will be a “strategic investor and partner” to the new firm, the statement said, without giving further details.

The name of the firm and the scale of the assets it will manage were not disclosed, but its structure reflects the blurred lines between state and private assets in Abu Dhabi.

ADQ and IHC, a listed business linked to Abu Dhabi’s ruling family, are chaired by Sheikh Tahnoon bin Zayed al-Nahyan, the UAE’s powerful national security adviser and a brother of the country’s president.

ADQ is an increasingly active state vehicle, aiming to invest primarily in the Middle East, Africa and South Asia. IHC, meanwhile, has enjoyed a stunning increase in market value that has puzzled bankers in the region. IHC has said much of the increase in value stems from the transfer of assets from Royal Group, another Abu Dhabi conglomerate.

Buoyed by high commodity prices and determined to diversify their oil-reliant economies, Gulf states have been a magnet for Wall Street firms.

Alongside ADQ, IHC and ADG, the new firm also aims to manage capital from third parties, such as institutional investors and family offices. Based in Abu Dhabi, the firm eventually intends to manage offices in North America, Europe and Asia.

William Ford, the chief executive and chair of General Atlantic, said that the new firm will “play an important role in strengthening Abu Dhabi’s position as an emerging global financial centre.”

New York-based General Atlantic, which manages $72bn in assets, tends to take minority stakes in privately held companies, in contrast to rivals such as Blackstone and KKR who are best known for taking publicly traded companies private.

General Atlantic has been quick to expand its overall investment platform in recent years. Last October, it acquired a credit investment manager and launched its own lending business, called General Atlantic Credit. It has also targeted fast growth in the Middle East, where it aims to draw in new assets and uncover investments.