Key Takeaways:
- Mubadala sold $1.9 billion of GlobalFoundries shares via block trade
- ADIA cashed out $273 million from Medline, its second sale this year
- Both funds benefit from Innio's $2.03 billion US IPO targeting a $20.25B valuation
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Abu Dhabi wealth funds sell $2.2B in US stocks as markets rally
Abu Dhabi's two largest sovereign wealth funds sold a combined $2.2 billion of US equities this week, locking in gains as the S&P 500's rally from its March low topped 19 percent.
Mubadala Investment Co. on Tuesday sold about $1.9 billion of GlobalFoundries Inc. shares through a block trade, according to a company statement. The fund retains a 73 percent stake in the chipmaker and said it remains "highly aligned" with GlobalFoundries' strategic direction, adding that broadening the shareholder base would strengthen the company's market position.
Abu Dhabi Investment Authority, known as ADIA, raised $273 million from a share offering in medical supplier Medline Inc., its second sale in the company this year. ADIA had previously collected $253 million from a March sale that included an overallotment option. The two funds are also positioned to benefit from Innio's US initial public offering, with the Austrian gas engine maker targeting a valuation of as much as $20.25 billion in a deal that could raise $2.03 billion. ADIA holds a significant minority stake in Innio's parent company, AI Alpine, alongside majority owner Advent International. Innio plans to offer 75 million shares priced between $24 and $27 each, with the IPO expected to price this week.
The selling spree comes as global equity markets have climbed sharply. The S&P 500 has gained more than 19 percent since its March low, giving sovereign funds a favorable window to trim positions and recycle capital into new investments. ADIA last week joined CVC Capital Partners' 10.7 billion-euro ($12.4 billion) acquisition offer for Italian drugmaker Recordati SpA, signaling the fund remains active in deploying proceeds into new assets even as it pares existing holdings.
The divestments suggest Abu Dhabi's funds see current US equity valuations as an attractive exit point after the recent rally. Investors will watch for follow-on sales by other sovereign wealth funds, which could add near-term pressure on GlobalFoundries and Medline shares. Mubadala's next major portfolio update is expected when GlobalFoundries reports second-quarter earnings in August.
This article is for informational purposes only and does not constitute investment advice.
[1] The owner is also short of money! Abu Dhabi sovereign funds sell billions of dollars in U.S. stock holdings[2] Abu Dhabi wealth funds are raising billions in share sale spree[3] Innio targets $20.3B valuation in US IPO led by Advent International[4] Abu Dhabi Wealth Funds Are Raising Billions in Share Sale Spree - Bloomberg.com[5] Mubadala Technology Investment Company in Sale of GlobalFoundries Shares for $1.8 Billion of Proceeds - Cleary Gottlieb
