Abu Dhabi Fund Blocks $800 Million Private-Equity Asset Shuffle

A Houston-based private equity firm was stopped in its tracks when an investor cried foul as it tried to sell one of its assets to itself, one of the first times such a dispute has spilled into public view.

Energy & Minerals Group had already lined up investors for a continuation fund of at least $800 million when Abu Dhabi Investment Council sued over the maneuver and halted the process, according to people with knowledge of the matter.

The sovereign wealth fund — an independently run unit of Mubadala Investment Co. — last week sued to stop the private equity ...