Mubadala will launch a joint fund worth US$10 billion with two Chinese state institutions, it was announced on Monday.
Mubadala, Abu Dhabi’s strategic investment company, will manage the UAE-China Joint Investment Cooperation Fund with China Development Bank Capital and China’s State Administration of Foreign Exchange.
The UAE and Chinese governments will each contribute $5bn, or Dh18.3bn, to the fund, which will invest in “sectors of strategic importance for the UAE and China”, the Government said.
Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi, is in China on a three-day state visit.
“This investment fund is a reflection of the growing partnership between the UAE and the People’s Republic of China,” said Sheikh Mohammed, also Deputy Supreme Commander of the Armed Forces.
“The launch of this strategic, commercially driven fund represents the next stage of our partnership as we seek to work more closely in developing our economies and contributing to global growth.”
Xi Jinping, president of China, said: “This dynamic investment fund will serve to further strengthen and deepen the strategic and economic relationship between China and the UAE.
“This fund will also play a critical role in supporting the One Belt, One Road initiative, as we work towards improving connectivity and cooperation with our regional partners across Eurasia.”
Mubadala, which aims to invest in assets that promote Abu Dhabi’s development, has already launched similar joint investment ventures.
In 2013, it launched a $2bn fund with the Russian Direct Investment Fund, a state-backed asset manager. It also has joint investment vehicles with GE Capital and Trafigura.
The fund has prominent political backing.
China’s One Belt, One Road strategy aims to encourage investments in infrastructure projects along the medieval Silk Road trade route.
Attracting foreign investors to develop projects along this route is important to China’s leadership, said Chang Liu, of Capital Economics.
“It’s symbolically important for China to have foreign investment partners in South-East Asia and the Middle East,” Mr Chang said. “Part of the purpose of One Belt, One Road is symbolically to connect these countries. It’s politically important.”
The UAE is one of the founder members of the Asian Infrastructure Investment Bank, a $100bn fund regarded as a rival to the International Monetary Fund for stewardship of the world’s economy.
For more on the UAE and China’s agreements:
› UAE renews renminbi swap deal with China
› Sheikh Mohammed bin Zayed begins China visit at Great Wall
› Sheikh Mohammed bin Zayed and UAE dignitaries on China state visit - in pictures
› A breakdown of dealings between UAE and China - graphic
› Visit marks the beginning of a 'new era of UAE China relations'
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UK's plans to cut net migration
Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.
Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.
But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.
Language requirements will be increased for all immigration routes to ensure a higher level of English.
Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.
The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.
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Favourite anime series: Death Note, One Piece and Hellsing
Favourite book: Designing Brand Identity, Fifth Edition
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UAE currency: the story behind the money in your pockets
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How has net migration to UK changed?
The figure was broadly flat immediately before the Covid-19 pandemic, standing at 216,000 in the year to June 2018 and 224,000 in the year to June 2019.
It then dropped to an estimated 111,000 in the year to June 2020 when restrictions introduced during the pandemic limited travel and movement.
The total rose to 254,000 in the year to June 2021, followed by steep jumps to 634,000 in the year to June 2022 and 906,000 in the year to June 2023.
The latest available figure of 728,000 for the 12 months to June 2024 suggests levels are starting to decrease.
Zayed Sustainability Prize
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
