Exclusive: Mubadala eyes up to $1bn for second infra fund

A first close is expected in the first half of next year and the fund will include an expansion outside the Middle East.

Mubadala Infrastructure Partners is preparing to launch its second infrastructure fund, targeting between $500 million and $1 billion, Infrastructure Investor has learnt.

The infrastructure arm of Abu Dhabi sovereign wealth fund Mubadala Investment Company has received a $100 million anchor commitment from its parent for the successor to its 2008-vintage Mubadala Infrastructure Partners I, which raised $425 million and is fully deployed into eight assets.

A first close for the fund of between $300 million and $400 million is envisaged for the first half of next year, targeting commitments from a variety of institutional investors and sovereigns, said a source close to the matter. An initial pipeline of assets is currently being considered and is expected to be executed ahead of the first close. MIP II is understood to be aiming for typical emerging market fund returns of mid to high teens.

As well as the increased size, Mubadala’s second fund is also set to expand its investment strategy. While the first vehicle invested predominantly in assets or companies in the UAE, Bahrain and Turkey, Mubadala’s latest offering is looking at investments in Africa and Southeast Asia and the firm has set up an office in Johannesburg as part of this strategy.

MIP II is believed to be aiming to execute a similar strategy to its predecessor, which took minority stakes in transport, energy, water, telecoms and social infrastructure projects and companies and is now thought to be preparing to realise the fund. It was sponsored by Mubadala, GE and Credit Suisse and received commitments from between 10 and 15 LPs. Investments included Abu Dhabi Ports Operating Company, Alcazar Energy and the United Arab Emirates University.

Mubadala Infrastructure Partners declined to comment.