There's a profit motive behind transparency

Mubadala and ADIA have different reasons to be more transparent, but this enhances the ability of both to generate profits.

From the canyons of Wall Street to the shores of the Gulf, calls for financial institutions to be more transparent are louder than ever. In the UAE, they do not appear to have fallen upon deaf ears. Earlier this month the world's largest sovereign wealth fund, ADIA, made its most extensive disclosure of its holdings to date. And as we report today, Mubadala, an investment vehicle owned by the Abu Dhabi Government and established to diversify the emirate's economy, has released a comprehensive statement of its performance.
ADIA and Mubadala are not banks or public companies; they do not have the same reporting requirements or obligations to public shareholders. There are also incredible differences between the two. ADIA invests largely outside the Gulf region; Mubadala invests at home with development goals in mind as well as a mission to generate a profit. While ADIA and Mubadala are responding to different imperatives, both have recognised the need for greater transparency.
Mubadala's disclosures are far more extensive than ADIA's, and with good reason. Mubadala's report shows that it is weaning itself off government funding and in its place, it must raise funds on international capital markets. Last year Mubadala launched a $1.85 billion bond offering and took a ?1 billion bank loan. To raise this capital at affordable rates, Mubadala must present a clear picture of its plans and profitability outlook. There is a direct relationship between the level of Mubadala's transparency and the cost at which it is able to borrow, and subsequently, its ability to make a profit.
ADIA does not have to raise funds on international markets, but that does not mean that transparency is not also in its interest. The fund realises this. It was an original signatory of the Santiago principles in 2008, which outlined the commitment of some of the world's largest sovereign wealth funds to show that their investments were driven by a profit motive rather than a political agenda. Still, the timing of a fund's investments and the strategies behind them are assets themselves. Sovereign wealth funds must attempt to balance the need for disclosure with the need to protect this proprietary information.
ADIA and Mubadala are not claiming to be as transparent as companies listed on many international exchanges. But many of these companies' commitment to "transparency" involved the release of jargon-filled reports meant to obfuscate rather than clarify. As a former CEO on Wall Street is reported to have said: "It's too much to expect the people who run big Wall Street firms to speak in plain English, since so much of their livelihood depends on people believing that what they do cannot be translated into plain English."
Both ADIA and Mubadala have offered a more detailed accounting of their operations - and in plain English. It is clear that in the long term, this effort will improve their ability to generate profits.

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km

The specs: 2018 Alfa Romeo Stelvio

Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km