(Bloomberg) -- Mubadala Capital is targeting popular international food franchises that are struggling to turn a profit in Brazil as it seeks to boost its presence in Latin America’s largest economy, according to a person familiar with the matter. 

The firm, a unit of the Abu Dhabi sovereign wealth fund, recently took control of Zamp, which operates Burger King and Popeyes restaurants in Brazil. The goal is to transform it into a large group housing several foreign food franchises, with Outback Steakhouse being eyed among several potential targets, the person said, asking not to be identified because discussions are still private. 

The fund doesn’t plan any immediate management changes at Zamp after taking control, the person added. 

Zamp and Mubadala declined to comment. Outback said it doesn’t comment on market speculation. 

Food retailers are struggling after an aggressive cycle of interest-rate hikes pushed borrowing costs to as much as 13.75%, from a record low of 2% during the pandemic. The competitive and highly indebted sector is growing at a slower pace and has opened fewer stores than in the previous years. 

Outback’s Brazilian operation, meanwhile, increased its market share to 29.6% in 2023 from 26.8% the previous year. Sales rose 0.6% in the fourth quarter, the company said in its earnings report. 

Fitch Ratings last year revised the outlook on Zamp’s local-currency debt citing the impact of higher-than-expected volatility on performance amid a still-recovering economy and intense competition, which hindered a stronger improvement of margins. 

Mubadala invests “primarily in control positions in mature companies that are facing some form of complexity or distress, but where the underlying business fundamentals are compelling,” according to filings.

The firm is also negotiating the license for Starbucks in the country, after its previous operator, SouthRock Capital, filed for bankruptcy protection. SouthRock also runs local units of brands like Subway and Eataly. 

Read: Mubadala Takes Control of Burger King Brazil Operator Zamp

Mubadala Capital is a wholly owned subsidiary of Mubadala Investment Company, the $280 billion sovereign wealth fund. Mubadala, which has invested more than $5 billion in Brazil through Mubadala Capital since 2012, also operates assets ranging from refining to toll roads and a metro line in the country. In October, it closed its second Brazil opportunities fund with over $710 million of commitments, according to a statement. 

The fund is also planning to launch a stock exchange in Brazil to rival the B3 bourse through a company it acquired in 2023, the Americas Trading Group SA. At the time, Mubadala said in a statement that it planned to help further develop regional capital markets and to scale ATG’s business including enabling greater access to brokers, institutional investors and asset managers with new technologies. 

Read: Mubadala Capital to Revive Plans for Rival Exchange in Brazil

(Updates with Outback earnings in paragraph six.)

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