UPDATE 2-Abu Dhabi's Lunate buys stake in ADNOC pipeline assets

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Lunate buys 40% stake in ADNOC Oil Pipelines

Purchased from Blackstone, KKR for undisclosed sum

Adds details, context

By Hadeel Al Sayegh

- Abu Dhabi investor Lunate said on Wednesday it had bought a 40% stake from private equity firms BlackRock BLK.N and KKR KKR.N in the entity that leases Abu Dhabi National Oil Company's (ADNOC) oil pipelines.

The terms of the deal were not disclosed. The transaction returns the stake to local hands after the two U.S funds bought it for $4 billion in 2019, becoming the first foreign investors to acquire infrastructure assets of a Gulf national oil company.

It highlights how Abu Dhabi, home to three wealth funds that collectively manage about $1.4 trillion of assets and positions itself as the "Capital of Capital", is creating a new national champion in the alternative investments sector with Lunate.

Alternative investments are in areas such as private equity and infrastructure, rather than traditional financial instruments such as equities and bonds.

ADNOC Oil Pipelines, which has a 23-year lease on ADNOC's ownership interests in 22 pipelines, was formed as part of a broader strategy by ADNOC to raise billions of dollars through sales of stakes in energy assets and attract foreign investors.

Lunate's investment "aligns with our long-term capital strategy to identify and invest in premium infrastructure assets," managing partner Murtaza Hussain said in a statement. "It also presents an opportunity to invest in a core Abu Dhabi asset and demonstrates our confidence in the UAE economy."

Lunate manages $105 billion of assets and is in part backed by sovereign wealth fund ADQ. It is part of the business empire steered by Sheikh Tahnoun bin Zayed Al Nahyan, the United Arab Emirates' (UAE) national security adviser and brother of UAE President Sheikh Mohammed bin Zayed Al Nahyan.

Sheikh Tahnoun also chairs the Abu Dhabi Investment Authority, estimated by wealth fund tracker Global SWF to manage $968 billion in assets, and ADQ, the emirate's third largest wealth fund.

Lunate invests across private markets including buyouts, growth equity, early and late-stage venture capital, private credit, real assets, and public equities and public credit, according to its website.

It launched a $30 billion climate fund dubbed ALTÉRRA at the COP28 U.N. climate summit, in collaboration with global asset managers BlackRock, Brookfield, and TPG, in December.

Lunate falls under a newly formed holding company called 2PointZero, whose portfolio includes assets across industries from asset management to mining, and which is owned by IHC, Abu Dhabi’s largest listed company. IHC is planning to list 2PointZero next year, Bloomberg reported last month.

(Reporting by Hadeel Al Sayegh.
Editing by Ros Russell, Anousha Sakoui and Mark Potter)

((Hadeel.AlSayegh@thomsonreuters.com; +971566883310;))

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