SoftBank Sells Fortress Stake to Mubadala, Fortress Management Team
Posted on 05/22/2023
Abu Dhabi-based Mubadala Investment Company and Fortress Investment Group LLC agreed to buy 90% of the Fortress Investment Group equity held by Japanese conglomerate SoftBank Group Corporation. 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 of directors. Mubadala Capital, which currently holds a 10% stake in Fortress through its private equity funds, will own a 70% stake. Fortress Investment Group had US$ 45.8 billion of assets under management as of December 31, 2022. Managing partners Drew McKnight and Joshua Pack will be appointed co-CEOs of Fortress and co-chairman Pete Briger will be appointed chairman.
Mubadala Capital’s CEO and managing director, Hani Barhoush, will continue to serve on the board. The transaction is expected to close in the first quarter of 2024, subject to regulatory approvals.
SWFI estimates the deal to be around US$ 2 billion.
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 in the transaction. Skadden, Arps, Slate, Meagher & Flom LLP represented Fortress in the transaction.
The Raine Group served as exclusive financial advisor and Morrison Foerster served as legal counsel to SoftBank.
SoftBank posted a US$ 7.18 billion net loss for the year ended March 31, 2023. SoftBank has been selling off assets to shore up its balance sheet.
In 2017, SoftBank acquire Fortress Investment Group for US$ 3.3 billion.
SoftBank is now looking at becoming a lender to certain markets. The Asian tech conglomerate is keen on the world of private credit. This is after SoftBank tried to run a massive venture capital fund called the Vision Fund.