Mubadala-Backed AAF Management’s Deliberate Venture Strategy
Since its founding in 2017 by Omar Darwazah and Kyle Hendrick, AAF Management has distinguished itself by resisting the common venture capital trend of rapidly scaling fund sizes. Instead, the Washington-based firm prioritizes maintaining smaller, more manageable funds to ensure strong alignment between general partners and limited partners, a philosophy that has fueled its growing reputation and solid returns. AAF’s latest capital vehicle, the $55 million Axis Fund, represents its fourth fund and marks a strategic evolution. This hybrid early-stage fund combines direct investments in startups with commitments to emerging venture funds, positioning AAF as a comprehensive capital partner for both founders and fund managers.
Fund Structure and Strategic Focus
The Axis Fund brings AAF’s total assets under management to approximately $250 million across four funds. Unlike many firms chasing scale, AAF consciously avoids the pitfalls of large fund sizes, which can skew priorities toward management fees rather than carried interest, potentially misaligning incentives.
“Running a $50 million fund is very different from running a $500 million fund. Large fund sizes can disrupt GP-LP alignment as it becomes a function of management-fee generation versus carried-interest generation, and that’s not a game we want to play.” — Omar Darwazah, General Partner
The fund allocates roughly 80% of its capital to direct investments in startups, spanning pre-seed to pre-IPO stages, and 20% to emerging managers’ funds—typically their first or second vehicles under $50 million. This dual approach creates a diversified exposure while fostering relationships with promising new fund managers.
Portfolio and Investment Insights
Since inception, AAF has supported 25 pre-seed and seed-stage funds and made five direct investments in early-stage and growth startups through the Axis Fund. Its broad network grants indirect stakes in high-profile unicorns such as Mercury, Deel, Retool, and emerging AI companies like Motion and Eleven Labs via LP positions in seed funds including Leonis Capital and Quiet Capital.
“The richest dataset of private-market companies at the earliest stages is accessed only through LP checks in emerging managers.” — Kyle Hendrick, General Partner
AAF’s portfolio encompasses approximately 800 venture-backed companies launched between 2021 and 2025, reflecting extensive access to early-stage innovation. Notable direct investments include Current, Drata, Flutterwave, Jasper, and Hello Heart.
Value-Add and Network Leverage
AAF emphasizes its role as a capital connector rather than an operational advisor. The firm leverages its LP relationships with over 45 active venture funds to facilitate founder access to subsequent funding rounds, particularly growth-stage capital. This network-driven approach is especially valuable for startups transitioning beyond early stages, as it enables seamless introductions to a broad ecosystem of investors without founders needing to manage multiple relationships.
Investor Base and Leadership Experience
AAF’s fourth fund is backed by a diverse group of institutional investors including Abu Dhabi’s Mubadala, family offices across the U.S., Europe, and MENA, leading U.S. asset managers, and a publicly traded company. This broad support underscores confidence in AAF’s distinctive strategy. Co-founders Darwazah and Hendrick bring complementary backgrounds—Darwazah with extensive experience bridging Gulf capital and U.S. startups through corporate finance and private equity, and Hendrick combining entrepreneurial and diplomatic expertise, including tenure at the UAE Embassy and Abu Dhabi family offices.
Over eight years, AAF has completed 138 direct investments and supported 39 emerging managers, yielding 20 portfolio exits valued at nearly $2 billion combined. These exits include companies like TruOptik, MoneyLion, and Even Financial, with acquisitions by public companies such as TransUnion and Affirm. According to data from Cambridge Associates and Carta, several of AAF’s fund vintages rank in the top decile for net total value to paid-in (TVPI) multiples, reflecting the success of its selective and diversified approach.
“Our strategy enables us to distinguish signal from noise and increase our odds of backing outliers—fund returners, 10x cash-on-cash companies, and seed-to-unicorn investments.” — Omar Darwazah
FinOracleAI — Market View
AAF Management’s hybrid fund-of-funds strategy positions it uniquely within the venture capital landscape. By balancing direct startup investments with stakes in emerging funds, the firm optimizes diversified exposure and access to early-stage innovation.
- Opportunities: Access to a broad pipeline of emerging managers and startups increases the potential for high-return investments and early identification of market leaders.
- Risk Mitigation: Smaller fund sizes help maintain strong GP-LP alignment, reducing pressure to prioritize fees over returns.
- Network Leverage: Extensive LP relationships facilitate follow-on funding and support for portfolio companies without operational overhead.
- Geographic Diversification: Backing from Gulf and global investors enhances cross-border capital flows and market insights.
- Performance Track Record: Historical exits and top-quartile vintage rankings reinforce the strategy’s effectiveness.
Impact: AAF’s disciplined, network-driven approach strengthens its position as a differentiated venture partner, likely to continue generating above-market returns and fostering innovation across early-stage ecosystems.
