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Mubadala steps up Asia investment drive

Wealth fund targets doubling its exposure in Asia by 2030

Mubadala Investment Company, Abu Dhabi’s sovereign wealth fund, led a Rs10 billion funding round of Avanse Financial Services, India’s education-focused non-banking financial company.

The new investment, which is in line with the wealth fund’s target of doubling its exposure in Asia by 2030, marks Mubadala’s first in the financial services sector in India.

Mubadala led this round of funding through its affiliate Alpha Investment Company with participation from Avendus PE Investment Advisors Private Limited via its fund Avendus Future Leaders Fund II.

The funds will enable Avanse to strengthen its position in the rapidly evolving education financing segment, focusing on creating unique customer experiences and achieving sustained profitable growth.

Of the nearly $300 billion in assets under management, Mubadala has only 12 per cent in Asia today. Mubadala, one of Abu Dhabi’s three main sovereign wealth funds charged with helping diversify Abu Dhabi’s economy, wants to move that number closer to 25 per cent by as soon as 2030.

Avanse is the second-largest NBFC in the education finance space in India and has been on a strong growth trajectory as it plays a transformational role in the education financing sector and has fulfilled the educational dreams of Indian academic aspirants across various countries. The company has also provided growth and working capital to Indian educational institutions As of December 2023, the company’s AUM stands at Dh5.5 billion.

“Avanse will continue to enable young generations of Indian students to fulfil their aspirations. We are thrilled to partner with Amit and the management team of Avanse alongside institutions of the caliber of Warburg Pincus, Kedaara Capital and the IFC. We look forward to further enabling the growth of the business,” said Luca Molinari, head of Asia and Financial Services at Mubadala.

“Avanse, driven by its vision to democratise education in India, has transformed into one of India’s premier education finance companies. We are thrilled to collaborate with Mubadala Investment Company as Avanse continues to advance its long-term objectives,” said Namenda Ostawal, managing director and head of India, Warburg Pincus.

Amit Gainda, managing director & CEO, Avanse Financial Services, said Avanse’s new strategic investors share a common vision of strengthening the education financing segment in India. “The growth capital will enable us to strengthen our brand proposition, integrate digital solutions and innovate to build more depth into our product range as we work towards delivering greater stakeholder value.”

Global SWF, which tracks the world’s sovereign investment funds, said in its 2024 annual report that three SWFs from the UAE invested a combined $36.5 billion in 2023.

Mubadala was ranked third in the top 10 list of SWFs with investments of $17.5 billion, followed by Abu Dhabi Investment Authority (Adia) with investments of $13.2 billion.

Qatar Investment Authority was ranked seventh with deployments worth $5.9 billion. Abu Dhabi’s ADQ took the eighth spot with investments amounting to $5.8 billion.

Mubadala focused on bolstering the UAE’s economic strength with co-investments with ADQ and Brookfield in Dubai-based payments provider Network International Holdings and US-based Resilience in the biopharma sector.

According to Global SWF, one of the most active sellers in the past few years has been Mubadala, which divested $122.7 billion between 2018 and 2022, almost the same figure it had invested.

Global SWF expects assets of state-owned Investors, including sovereign wealth funds, public pension funds, and central banks, to reach $54.9 trillion by 2025 and $71.0 trillion by 2030.