Mubadala part of $1.95bn deal for stake in US insurance giant

WAM

• Abu Dhabi’s Mubadala has partnered with Stone Point Capital
• Together with other investors, they bought a 20% stake in Truist
• The transaction values Truist at $14.75 billion

Mubadala Investment Company has partnered with co-investors to buy a stake in the sixth-largest insurance broker in the US.

The Abu Dhabi sovereign investor announced on Tuesday that it has partnered with primary investor Stone Point Capital and other investors to purchase a 20 percent stake for $1.95 billion in Truist Insurance Holdings, a subsidiary of Truist Financial Corporation.

Based in North Carolina, Truist Insurance Holdings operates more than 240 offices through its subsidiaries.

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The transaction, which is expected to close in the second quarter of the year, represents an aggregate value of $14.75 billion for Truist Insurance Holdings, a statement said.

The deal comes as Middle Eastern sovereign wealth funds have more than doubled their investments in Western economies, including the US and Europe, from $21.8 billion in 2021 to $51.6 billion in 2022.

“Truist Insurance Holdings is a very attractive business with a leadership position in US insurance distribution, and has generated a consistently strong financial performance,” said Luca Molinari, head of financial services at Mubadala. 

Earlier this year, Mubadala bought US-based Dental Care Alliance, a dental services organisation with nearly 390 allied practices. The investment was made in collaboration with funds managed by Harvest Partners, a US-based private equity firm focused on middle-market companies.

Mubadala’s $284 billion portfolio spans six continents with interests in multiple sectors and asset classes. 

In December its CEO Khaldoon Al Mubarak said that 2023 would be a tough year for the global economy, but that the fund would be focused on opportunities serving a longer horizon.

As a global investor, he said Mubadala would continue to follow an “agnostic” investment approach looking at growth patterns and long-term sustainable returns, and would continue to focus on sectors such as renewable energy and technology.