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French SWF picks Mubadala for first co-investment pact

The French economy will be the target of future co-investments by the nation’s $US28 billion sovereign wealth fund, the Fonds Strategique d’ Investissement (FSI), and the $US10 billion Mubadala Development of Abu Dhabi, after the two investors forged a strategic partnership this week.

The deal, signed by French President  in Abu Dhabi on May 26, marked the FSI’s first move to conduct co-investments with another sovereign wealth fund.

Under the agreement, the strategic investors will seek mutually beneficial investments in private or listed French companies in the technology, health sciences, biotechnology and renewable energy sectors.

The French minister for the economy, industry and employment, Christine Lagarde, said the country embraced foreign direct investment, placing France as the second most accommodating market for offshore capital after the US. She brushed aside speculation over the motives driving Abu Dhabi sovereign wealth funds, telling the emirate’s government-owned newspaper, The National, that France would “welcome” investments from Mubadala and other Abu Dhabi funds.

The French government did not view the funds’ activities as threatening, and had sought engagement to learn about their strategies and the scope of the shareholdings they aim to buy in target companies.

Investment targets would find the strategies and management of the Abu Dhabi funds “perfectly reassuring,” she said.

The chief executive officer of Mubadala Development, Khaldoon Khalifa Al Mubarak, said the deal with the FSD was aligned the aim of the Abu Dhabi investor to partner with high-quality organisations to develop and operate businesses that generate investment outperformance and help diversify the emirate economy away from oil.

President Sarkozy signed the agreement during a visit to the United Arab Emirates to inaugurate France’s first military base in the Persian Gulf.


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