Abu Dhabi’s Mubadala Investment is weighing its first investment in Saudi Arabia together with the kingdom’s sovereign fund and has started talks to invest in US technology companies.
The sovereign fund is considering investing in the technology, real estate and industrial sectors in Saudi Arabia, said the chief executive Khaldoon Al Mubarak in Riyadh. The kingdom is “a tremendous market” and Mubadala is exploring investments with the Public Investment Fund, he said.
Sovereign wealth funds in Arabian Gulf states are looking at opportunities in new areas, such as technology, to lessen their reliance on volatile oil markets. Mubadala plans to invest as much as US$15 billion over five years in SoftBank’s Vision Fund.
“After we started our relationship with SoftBank, it became clear to us that we needed to go deeper,” said Mr Al Mubarak. “In order to go deeper, we needed to be closer to the market.”
Mubadala last week said it was opening an office in Silicon Valley to manage this commitment.
The company’s venture capital arm, which is to be based in the US and is the company’s first office in the country, will also oversee Mubadala Ventures Fund I, a $400 million early growth venture capital vehicle with two main investors, Mubadala and Softbank, that will aim to have a portfolio of 25 companies in North America and Europe.
The second $200m Fund of Funds will invest in established and emerging fund managers, with investments ranging between $50m to $70m a year in US and European venture capital funds.
Mubadala has started talks to invest in US technology companies, it said.
“We are excited to partner with Mubadala and invest in their first venture capital fund,” Rajeev Misra, the chief executive of the SoftBank Vision Fund, said last week. “Mubadala is a strategic partner to SoftBank, and this initiative will be an important part of the Vision Fund’s ecosystem of companies and entrepreneurs. Mubadala’s approach to venture capital and their San Francisco office indicates a long-term commitment to the technology community.”