Mubadala, Abu Dhabi Sovereign Wealth Fund, Seeks To Make More Investments In Technology, Asia

After having poured in $1.2 billion into Indian mobile phone operator Reliance Jio Platforms, the Mubadala Investment Company of Abu Dhabi is seeking to make more investments in tech firms.

“We need to be much more exposed to technology in all its facets. We’re on the right track,” said Khaldoon Al Mubarak, the fund’s group chief executive and managing director.

Mubadala, which is Abu Dhabi’s sovereign wealth fund and has some $232 billion in assets, may also buy U.S. tech stocks, said Saeed Al Mazrouei, deputy chief financial officer and head of mergers and acquisitions at the fund.

Mubadala is also looking closely at India, China and Southeast Asia for possible investments, Al Mubarak noted.

“We are, from a relative perspective, under-invested in Asia,” he said. “So you’ll see us grow our portfolio in Asia and expect us to do more in the med-tech space, artificial intelligence, life sciences, agribusiness. These are spaces we like.”

Mubadala, the second largest state-owned investor in Abu Dhabi behind Abu Dhabi Investment Authority, currently has only about 9% of its portfolio invested in Asian assets.

Mubadala has also made a $15 billion commitment to the SoftBank Vision Fund, which has largely focused on tech startups.

Al Mubarak also said 38% of Mubadala’s portfolio is currently parked in the U.S.

“I don’t see us reducing exposure [in the U.S.]. If anything, it’s about maintaining and continuing to grow in that space,” he said. “The U.S. will continue to be a very interesting place to invest in… [But] there are high valuations at the market. If you look at, let’s say, the U.S. market right now, it does not reflect the reality of the macro situation we see in the U.S.”

Al Mubarak cautioned that since the outbreak of covid-19 the fund’s investment committee’s risk appetite shifted somewhat.

“Over the last few weeks there has been a lot of knowledge and appreciation of what sort of risks we can take from a corporate perspective,” he said.

Mubadala’s investment strategy is now “on the offense rather than on the defensive.”

Al Mubarak also believes that there will be a slow economic recovery after the coronavirus passes.

“I believe we have to now transition to the mode of living with COVID,” he said.

Mubadala is coming off robust performance in 2019 when it saw its asset size quadruple.

The fund’s comprehensive income – which includes net income and unrealized income – surged to 53 billion Dirhams ($14.4 billion) in 2019 from 12.5 billion Dirhams ($3.4 billion) a year earlier.

“Responsible deployment of capital, strong partnerships and agile investing remain at the core of Mubadala’s strategy,” said Al Mubarak. “2019 was a remarkable year for Mubadala. Not only did we deliver strong financial results, but we also continued to grow our presence across multiple asset classes in key sectors and markets to help diversify Abu Dhabi’s economy."

About 43% of Mubadala’s portfolio consists of direct and indirect investments in private equity, with 21% in public markets and 11% in real estate and infrastructure, among other sectors.

Mubadala forms a crucial part of the government’s strategy to diversify Abu Dhabi's revenue base and earn income away from oil. The fund has investments in five continents with stakes in aerospace, information and communications technology, semiconductors, metals and mining, renewable energy, as well as oil and gas and petrochemicals.

“In 2019, we continued to manage our balance sheet carefully, with a prudent debt-to-equity ratio of 11.8%," said Carlos Obeid, Mubadala's chief financial officer. "With a strong cash position, we will continue to look for opportunities in public funds and private assets as we manage through this complex economic cycle, while remaining a long-term, patient investor.”

Sheikh Mansour bin Zayed Al Nahyan, deputy prime minister of the United Arab Emirates, minister of presidential affairs and a member of the royal family of Abu Dhabi, emphasized the key role Mubadala plays in his nation’s future.

"Through investments at home and internationally, Mubadala has laid vital foundations across our non-oil economy, established and nourished entirely new industries, and provided essential infrastructure to ensure the UAE’s residents and the domestic economy can thrive," he stated. "As we emerge from the current [covid-19] crisis, Mubadala’s investments and partnerships with the world’s leading pioneering organizations continue to advance the UAE as a globally connected and sustainable home for ideas and innovation within our region. Mubadala exemplifies our values as a nation and will continue to lead as a global investor that delivers value for the UAE and for every community where we invest.”