Mubadala Investment Company, Abu Dhabi’s strategic investment arm, is looking to diversify its asset base as it continues to pivot to disruptive industries and ramps up investments in technology and healthcare.
A shift in the fund's strategy means more selldowns in "legacy commodity sectors" either through market listings or private placements, Khaldoon Al Mubarak, group chief executive of Mubadala told the Financial Times.
The company’s asset diversification and monitisation strategy includes its previously announced initial public offering for Emirates Global Aluminium, the UAE’s biggest industrial company outside the oil and gas sector. An IPO for satellite company Yahsat and possible listing of GlobalFoundries, the US-based chip maker, are also on the cards, according to the report.
Mr Al Mubarak reiterated that Mubadala, which has an asset base of $232 billion, remains focused on ramping up investments in China and India.
“The sectors we like, all have a significant growth trajectory in China and if you look at the overall portfolio and the percentage of coverage we have in China, it’s nowhere near where it should be,” Mr Al Mubarak said. “The same applies for India.”
After investing $1.2bn in Jio Platforms, the digital business unit of India's Reliance Industries, Mubadala is keen on exploring further opportunities in India, China and other South-East Asian markets, Mr Al Mubarak said in June last year. The sovereign wealth fund is predominantly interested in the technology sector, including medicine technology, artificial intelligence and agriculture technology in Asia.
The Covid-19 pandemic has accelerated Mubadala’s pivot to new technology as it doubles down on investment in clean energy, life sciences, mobility, automation, robotics and connectivity.
The way the company operated, invested and looked at potential opportunities has changed and will continue to evolve as the pandemic subsides. Even before the pandemic, Mubadala was increasing its technology investment and the Covid-19 outbreak proved that Mubadala was “on the right path” in its shift from the traditional investment model, Mr Al Mubarak told the Global Manufacturing and Industrialisation Summit in September last year.
“What Covid-19 has done, essentially, is supercharged that move [to diversify],” he said at the time.
Earlier this year, Mubadala changed its organisational structure along four lines of business – UAE investments, disruptive investments, direct investments and real estate and infrastructure – and said the new operating model will propel the company into the next phase of growth.
Mubadala deployed more funds and "monetised" more assets last year than the highs it hit in 2019, when it invested $18.5bn and raised $17bn through divestments, Mr Al Mubarak told the Financial Times, adding that annual results in June would reveal higher income.
Mubadala, which is an anchor investor in SoftBank’s Vision Fund, made a $2.4bn commitment to a partnership with US private equity firm Silver Lake in 2020. Last week, Group 42, an Abu Dhabi-based artificial intelligence and cloud computing company, which counts Mubadala among its shareholders, received a “significant” investment from Silver Lake.
In March Mubadala said it will invest £800 million ($1.01bn) into Britain’s Life sciences industry over the next five years, as part of a £1bn Sovereign Investment Partnership between the UAE and UK. The remaining £200m will come from the UK’s Life Sciences Investment Programme that was unveiled last year.
“We are not going to take a pause, the momentum is there and it’s the whole point with this shift in the portfolio,” Mr Al Mubarak told the newspaper. “I’m not saying we are going to completely exit headwind sectors, but the strategy of redeployment and rebalancing our portfolio strategy . . . has proven to be successful”.
Within the UAE, Mubadala’s focus is on the development of new industries in the country where “we can … be competitive globally and where we can have scale”.
“It’s that next industrial play. Life sciences, that’s a sector we know is going to be growing immensely and we have the sort of competitiveness in that space where we can create the right industries here,” Mr Al Mubarak said. “Technology is [another] area we are very strong in.”
