Mubadala Capital, the financial business of Abu Dhabi’s strategic investment company, is to set up under the jurisdiction of Abu Dhabi Global Market, the capital’s new financial free zone.
Ahmed Al Sayegh, ADGM’s chairman, announced the move at the Bloomberg Markets Most Influential Summit, saying that it “confirms the strategy that our sovereign wealth funds will move into the jurisdiction”.
The move is a significant development in ADGM’s growth.
Mr Al Sayegh said that, in just over a year since the market was declared “open for business”, it had attracted 210 companies, including some big-name international financial institutions.
But many analysts had been waiting for a move by a big Abu Dhabi financial business to back ADGM with a significant physical presence at Al Maryah Island, ADGM’s home.
Mr Al Sayegh said: “We have to show we can do financial business in the UAE and not go overseas. We have been exporting financial transactions abroad, and that has to stop. The financial sector is deep in the region, and is supported by the assets of our sovereign wealth funds.
“But we need to rethink what we are exporting in finance, and rethink this to provide jobs and growth and make companies grow here.”
Mubadala Capital, which holds equity and other interests in a number of global companies, already has a presence in the free zone, but Mr Al Sayegh said it would “soon” have a formal licence as an ADGM entity.
Waleed Al Mokarrab Al Muhairi, the deputy chief executive of Mubadala, said: “ADGM has become the heart of Abu Dhabi’s expanding financial services industry, and as such is the perfect location for Mubadala Capital.”
Mubadala Capital currently has about 100 employees on the Al Maryah site, which is owned by its parent company. It is seen as an increasingly important part of the investment development company, whose main role is to support the growth of a diversified economy in the UAE.
The role of the capital arm is threefold: to mange the partnerships with sovereign wealth funds in Russian, China and France, where the UAE has important relationships; it manages the equity investments Mubadala has in global companies, such as GE and Carlyle Group; and it monitors and manages private equity opportunities.
Mr Al Sayegh said: “As a financial centre, it is crucial for us to support the development of local entities across various sectors as they provide the core and sustainable force behind the growth of a financial centre.
“For example, in the financial sector, specifically on funds, we now have five domiciled funds and three foreign funds established in ADGM. This registered one of the fastest pace of funds creation in the region. In addition, some 35 special purpose vehicles have set up within the year catering to a broad range of business types, uses and industries.”
Some observers believe that Mubadala Capital’s move to ADGM will be followed by similar expressions of support from other big Abu Dhabi financial institutions.
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