Mubadala and Bahrain’s Mumtalakat sign deal to explore co-investment opportunities

The companies will exchange knowledge and best practices to strengthen their investment platforms

Abu Dhabi's Mubadala Investment Company has $243 billion of assets under management. Photo: Mubadala

Abu Dhabi’s Mubadala Investment Company has signed a preliminary agreement with Bahrain’s sovereign wealth fund Mumtalakat to explore co-investment opportunities in different parts of the world.

The two companies will also exchange knowledge and best practices to enhance their investment and operational capabilities as part of the agreement, they said on Tuesday.

“We are excited to collaborate with a like-minded institution such as Mumtalakat, [which] shares our commitment to building long-term, sustainable relationships,” said Waleed Al Muhairi, Mubadala’s deputy group chief executive.

The two companies did not provide further details.

With assets worth $243 billion under management, Mubadala plays an important role in Abu Dhabi's efforts to diversify its revenue base and generate income from sources other than oil.

The company’s investment portfolio spans five continents and it has interests in the aerospace, information and communications technology, semiconductor, metals and mining, oil and gas, renewable energy and petrochemicals sectors.

Mubadala is also pivoting towards investments in health care, life sciences, consumer-focused businesses, renewable energy and mobility as it seeks to tap into post-coronavirus growth sectors.

Mumtalakat holds stakes in over 60 commercial enterprises with a portfolio spanning sectors such as industrial manufacturing, financial services, telecoms, property, logistics, consumer products, health care and education. It manages assets worth $18.9bn and operates in 13 countries. About 60 per cent of the fund's investments are in Mena region while 32 per cent are in Europe and 8 per cent in North America.

"Mumtalakat is committed to helping drive the economic transformation of the Kingdom of Bahrain by continuing to grow and add value to our portfolio,” said chief executive Khalid Al Rumaihi.

“Our partnership with Mubadala not only strengthens our collective operational capacity but also bolsters historical ties, which supports our work in transforming the Bahraini economy.”

The agreement between the two entities comes at a time when sovereign wealth funds in the Middle East are increasingly shifting their investment strategies to support their economies amid the pandemic.

More than a third of sovereign funds globally and 57 per cent in the Middle East faced drawdowns last year, including 78 per cent of liquidity sovereign funds and 58 per cent of investment sovereign funds, according to a study by asset manager Invesco this year.

The study surveyed 141 chief investment officers, heads of asset classes and portfolio strategists at 82 sovereign wealth funds and 59 central banks around the globe, who manage $19 trillion in assets.

It said the portfolio cash reserves of Middle East sovereign funds also more than doubled during 2020.