More suitors vie for Abu Dhabi’s district cooling business

KKR and I Squared Capital are among global asset managers bidding for a district cooling business owned by Abu Dhabi’s Multiply Group, part of a $1.5 trillion empire overseen by one of the UAE’s most powerful sheikhs.

District cooling plants, which deliver chilled water via insulated pipes to cool offices, industrial and residential buildings, have been developed as a more economical and environmentally friendly alternative to air conditioning.

The Middle East’s biggest alternative investment manager, Investcorp, is among the potential suitors for PAL Cooling Holding (PCH), three sources told Reuters.

The asset managers join a race that includes CVC, which is working with Engie-backed National Central Cooling Company, also known as Tabreed, in a deal that could be worth around $1 billion, the sources said.

Abu Dhabi energy and utilities firm Taqa is another interested party. Potential buyers are expected to put forward binding bids next month.

KKR, Investcorp and Taqa declined to comment. Multiply, I Squared Capital, CVC and Tabreed were not immediately available for comment.

Reuters reported last month that Tabreed was working with Citi on a potential bid.

The interest in PCH underscores how buyout groups are now looking at local investment opportunities in the Gulf as governments in the region implement ambitious programmes to diversify their economies from oil. Before, equity firms would raise money there to invest elsewhere.

Last week KKR became the latest asset manager to announce plans to build a team in the region to go after Gulf deals.

• KKR signs a $5bn Gulf data centre deal in Dubai
• Tabreed explores buying Multiply’s cooling business
• Multiply Group targets Europe with Tendam stake buyout

Multiply is controlled by IHC, whose chairman is Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and brother of the country’s president who controls a sprawling business empire including two sovereign wealth funds.

Private equity funds worldwide secured around $680 billion in 2024, a 30 percent decrease from about $966 billion raised in 2023, S&P Global Market Intelligence data said in January.