Abu Dhabi state investment fund Aabar Investments has bought a 4.99 per cent stake in UniCredit, Italy’s largest bank by market capitalisation, for AED8.44bn ($2.3bn).   

The deal makes the fund UniCredit’s second-largest shareholder, after Italian investment bank Mediobanca.        

Aabar first invested in UniCredit when it bought $61.6m of convertible bonds issued by the Italian bank in March 2009.     

UniCredit has raised $4.9bn this year by selling new shares and has embarked on a sell-off of non-strategic assets in order to improve its capital position.

Aabar owns 9.1 per cent of German car maker Daimler, making it the largest shareholder, as well as a 32 per cent stake in Richard Branson’s commercial space travel company Virgin Galactic.

The Abu Dhabi fund announced on 22 June that it is considering delisting from the Abu Dhabi Securities Exchange (ADX) and converting into a private joint-stock company. The Abu Dhabi Stock Exchange General Index has declined by 6.9 per cent this year.

Aabar’s assets currently stand at around $10bn.