ABU DHABI — Apollo Global Management has agreed to buy a minority equity stake in Mubadala Capital, the alternative asset management arm of Abu Dhabi's Mubadala Investment Company, in a deal announced on Monday that the Abu Dhabi firm says should bring $5 billion of fresh commitments into its funds.

Apollo's holding will be close to 10 per cent, CNBC and Reuters reported, citing people familiar with the matter. Neither firm disclosed what Apollo paid.

The purchase buys Apollo a piece of a state-owned manager whose core alternatives business has grown to more than $60 billion across five strategies. It also runs against the usual direction of travel between Wall Street and the Gulf. CNBC said the deal continues a shift in which American firms, long drawn to the region as a source of capital, now put money directly into it.

Mubadala Capital said additional strategic investors will join Apollo as minority shareholders, and that together they are expected to commit an aggregate of $5 billion to its investment strategies at initial close. Apollo will also put capital to work across those strategies itself.

The founders of Silver Rock Financial already hold equity in the business, and Apollo will sit alongside them. Mubadala Investment Company stays the majority shareholder. Nothing changes in the way the firm is run, according to Mubadala Capital: it will stay independent, its governance arrangements stand, and the present management team keeps the final word on investments and day-to-day operations.

"Mubadala Capital was built to connect the world's capital with differentiated private market opportunities, and this partnership accelerates that ambition," said Hani Barhoush, the chief executive of Mubadala Capital. He called Apollo one of the most respected institutions in the industry and said it had been "a trusted partner to Mubadala and across Abu Dhabi for many years".

John Zito, co-president of Apollo Asset Management, said Mubadala had helped get several Apollo strategies off the ground and grow them.

"This investment will deepen our alignment and strengthen our mutual commitment to each other's success, while creating significant opportunities to reach a broader global investor base," Zito said.

The two institutions have worked together since 2022, when they set up a multibillion-dollar partnership that was extended two years ago, CNBC reported. Apollo said then that the tie-up would add to its Capital Solutions platform, letting the pair hunt together for borrowers and tailor debt and equity packages for companies anywhere in the world. A $2.5 billion vehicle followed in 2023, built to put money into private credit deals jointly over the next five years.

Mubadala Capital was founded in 2011 and, according to Semafor, was the first sovereign fund to take in money from outside investors. Private equity, credit and venture capital sit in the core business alongside a special opportunities strategy aimed at Brazil and the firm's Solutions and co-investment platforms. Once strategic partnerships are counted in, the firm says it manages, advises and administers more than $755 billion in assets. It employs more than 250 people in Abu Dhabi, London, New York, Rio de Janeiro and San Francisco.

Its parent held $385 billion in assets at the end of last year, Reuters reported. Semafor calls Mubadala the world's most active state-controlled investor and puts the combined holdings of Abu Dhabi's sovereign funds at $1.8 trillion.

Apollo had about $1.05 trillion of assets under management on June 30, according to the company. It has bought into other managers before, among them Diameter Capital, Thoreau and Motive Partners, CNBC said.

Mubadala Capital has spent the past year widening its own investor base. In January it raised a $554 million fund to invest alongside its parent and other global private equity firms, Semafor reported. It has also built partnerships with Fortress and Goldman Sachs, according to Reuters, as Mubadala has pushed deeper into alternative assets.

Spokespeople for both firms declined to comment before the announcement, CNBC reported. One person familiar with the deal told the network that "capital as a moat is a big thing", a reference to an industry in which scale increasingly decides who wins large mandates.

The agreement lands as global investment firms expand across the Gulf. Abu Dhabi styles itself the capital of capital, a label both CNBC and Semafor noted, and Apollo has spent about 15 years building relationships in the emirate, according to CNBC.

Goldman Sachs and Jefferies advised Mubadala Capital on the transaction, with Skadden, Arps, Slate, Meagher & Flom as legal counsel. Morgan Stanley advised Apollo, which used Paul, Weiss, Rifkind, Wharton & Garrison as its legal counsel.

The transaction is expected to close in the fourth quarter, subject to regulatory and legal approvals, with the $5 billion of commitments due at initial close.