Mubadala seeks infrastructure and property deals in global push

Platform run by Abu Dhabi's sovereign wealth fund has more than doubled portfolio to $11 billion since 2021, says chief executive

A consortium including BlackRock Real Assets and Mubadala invested $525 million in a subsidiary of India’s Tata Power last year to create a renewable energy platform. Photo: Mubadala
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Mubadala Investment Company’s Real Estate and Infrastructure Investments platform has a strong deal pipeline and is considering investment opportunities in renewable energy, gas infrastructure and property around the globe, its chief executive has said.

The platform — one of the four core businesses of Abu Dhabi’s sovereign investor Mubadala — is actively looking at one liquefied natural gas (LNG) terminal deal in the US, a gas infrastructure investment in Australia and renewable energy and real estate investments in India and some of the other Asian markets, Khaled Al Qubaisi told The National.

“We're actively looking to get one [deal] in the US and we're looking at one more in Australia, which is more of an integrated gas infrastructure [transaction],” he said.

The platform has invested about $7 billion since being carved out as a separate investment pillar in 2021 and its deal pipeline remains “robust”.

At any given time, it is actively evaluating 10 deals each in digital and traditional infrastructure sectors, as well as real estate transactions.

“Because of Mubadala being very well known, we get a lot of approaches, and also we have great partners who share a lot of things with us,” Mr Al Qubaisi said.

“We're very busy right now. We're closing a number of deals within TI [traditional infrastructure] and DI [digital infrastructure] that is more focused on maybe doing larger deals.”

Although the US and Europe remain vital markets for Mubadala, which at group level has about 45 per cent exposure to the US market alone, its infrastructure and real estate business is pivoting more to Asia, where it is evaluating several investment opportunities.

It is particularly focused on China, the world’s second-largest economy and India, the third-largest in Asia.

Countries such as India are now developed enough to provide the transparency and the ease of doing business and Mubadala is now “more comfortable going for the right kind of allocation” corresponding to the weight of these counties in the global economy, and “maybe even going over it”, he said.

Japan and South Korea, as well as other growth markets in Asia, are also on Mr Al Qubaisi’s radar.

“We've identified these markets as the main markets in Asia, but still, there are other markets around it, and within it, that provide great, great opportunities,” he said.

Although markets in Asia, which could yield “a lot of growth in the next five to 10 years” will remain a focus for Mubadala, Mr Al Qubaisi is also on the lookout for investment opportunities in Africa, which he says is the continent that is coming up after Asia.

“We're still maybe not at the point where we're fully comfortable to deploy sizeable capital there but we're looking at [African] markets, the ease of doing business, the ease of getting money in and out and the returns,” he said.

“I think there's an interesting market for us, maybe that will start being active in five years.”

Geographically, the platform's exposure today is just over 40 per cent to Europe, the Middle East and Africa. It has a 40 per cent exposure to the Americas and the remaining in Asia Pacific, he said.

Mubadala, which invests on behalf of the Abu Dhabi government, is at the heart of the emirate’s efforts to diversify its revenue base and generate income from sources other than oil.

The sovereign fund’s $284 billion investment portfolio spans five continents. It has interests in aerospace, information and communications technology, semiconductors, metals and mining, renewable energy, oil and gas and petrochemicals.

In recent years, the sovereign fund has turned from legacy assets to digital investments, communications and data centre business, life sciences, and the healthcare and bio-medical sectors.

The real estate and infrastructure platform was set up when Mubadala restructured its businesses into four investment categories that also included direct investments, UAE investments and disruptive investments.

Operating on three-year investment cycles, the platform is primarily focused on different types of real estate investments and digital and traditional infrastructure deals predominantly in international markets.

All three investment pillars currently account for one third of the platform’s portfolio and the company has seen “a lot of great opportunities … and the performance was really good in new investments”, said Mr Al Qubaisi.

“It's equal up to now and I expect it to stay the same also over the next three-year cycle,” he added.

The platform's assets under management have increased 2.4 times to about Dh40 billion ($11 billion) from Dh16.9 billion at the start of 2021 when it was set up.

Its number of investments have also surged 67 per cent to 72, from 43 over the same period as it invested in new markets and sub-sectors to boost growth, while exiting certain positions that were not in sync with its future growth strategy, Mr Al Qubaisi said.

“It's a clear message that we are growing and we are one of the fastest-growing platforms within the company,” he said.

Earlier this month, Mubadala and the British Columbia Investment Management Corporation, a Canadian pension fund, become anchor investors in Cube Highways Trust, an infrastructure investment trust in India.

Cube Highways Fund Advisors, the investment manager to the trust, has listed privately placed ordinary units worth 52.26 billion Indian rupees ($636.4 million), which Mubadala, BCI and other domestic institutional investors have subscribed to, Mubadala said in an April 19 statement.

In April last year, a consortium including BlackRock Real Assets and Mubadala invested $525 million in a subsidiary of India’s Tata Power to create the country’s “most comprehensible” renewable energy platform.

In October 2022, Mubadala joined investors including Global Infrastructure Partners to acquire Germany’s top offshore wind farm developer Skyborn Renewables.

The deal expands Mubadala's presence in Europe and the Asia-Pacific region at a time when it is pushing to increase its exposure to the booming renewable energy market.

In the digital infrastructure space, Mubadala last year invested $350 million in the Princeton Digital Group, which operates a portfolio of 20 data centres across Asia.

In October last year, Mubadala struck a deal with EQT Infrastructure to acquire a minority stake in Sweden's data and services company GlobalConnect.

In 2022, the sovereign wealth fund also committed an additional £300 million to CityFibre, the UK’s largest independent full-fibre platform, building on its initial £500 million investment in the company in September 2021 as part of the UAE-UK Strategic Investment Partnership.

Closer to home, Mubadala has invested in Saudi Aramco’s oil and gas pipeline deals, which “prove to be very solid and are doing very, very well”, Mr Al Qubaisi said.

“We're actively looking at other markets within the region, whether it's Egypt or it's more deals in Saudi and also in the neighbouring countries.”

The size of investments made by the platform range anywhere from $100 million to $800 million, depending on the type of the transaction and Mubadala funds these deals mostly from its own equity, Mr Al Qubaisi said.

However, it does not rule out innovative financing structures with investment partners and commercial financing options if required, he said.

Updated: April 27, 2023, 4:18 AM