Aldar Properties and Mubadala Capital have joined to launch an investment management platform that will connect global institutional investors with real estate and infrastructure opportunities in the UAE and Gulf region.
Based in Abu Dhabi Global Market, Aldar Capital will offer professionally managed funds for institutional investors, including sovereign wealth funds, pension funds, fund of funds, insurance companies and family offices, the two companies said on Thursday in a statement to the Abu Dhabi Securities Exchange (ADX).
Its first fund, which will be launched in 2026, will have an investment target of $1 billion.
The launch of Aldar Capital will create “a dedicated investment management platform that transforms our business from a regional real estate leader into a manager of global capital”, said Talal Al Dhiyebi, group chief executive of Aldar, Abu Dhabi's biggest listed developer.
“Aldar Capital will enable international investors to access the region’s next wave of growth and reinforces Abu Dhabi’s role as a leading hub for institutional investment.”
Measures introduced by the UAE to attract foreign investment, combined with its position as a gateway to the broader Middle East region, Africa and South Asia, have boosted its appeal. Both Dubai and Abu Dhabi are drawing large family offices, institutional wealth, global financial institutions, hedge funds and asset managers.
Abu Dhabi’s economy is projected to grow by about 6 per cent this year, driven by the easing of oil production cuts and a strong real estate sector, the International Monetary Fund has said.
The country's property market has been booming in recent years, having benefitted from government initiatives such as residency permits for retired and remote workers, expansion of the 10-year golden visa programme and overall growth in the UAE’s economy due to diversification efforts.
The collaboration combines Aldar’s real estate investment and development expertise with Mubadala Capital’s institutional fund management capabilities and global investor network, they said.
Aldar Capital will aim to offer fund investment strategies “spanning the full risk-return spectrum” designed to meet the diverse objectives of global institutional investors seeking “tailored exposure” to the region, they added.
Hani Barhoush, chief executive of Mubadala Capital, the Abu Dhabi investment company's asset management subsidiary, said institutional investors are increasingly prioritising real assets for their diversification benefits and long-term income potential, yet access to institutional-grade opportunities in the UAE and Gulf has been limited. Aldar Capital will seek to address this gap, he added.
Global investment in infrastructure is flourishing, driven by demand for new and upgraded systems and investment capital from institutional investors, said a new whitepaper from Abu Dhabi sovereign wealth fund ADQ. At least $100 trillion in global investment will be needed by 2040, the research found.
Gulf sovereign investors now control $7.3 trillion in infrastructure assets – expected to rise to $10.2 trillion by 2030 – and are emerging as formidable players in the global investment landscape, the report said.
The UAE and wider region’s real estate market has the “scale, maturity and transparency” global institutional investors seek, Mr Al Dhiyebi said.
Aldar Capital will further strengthen Abu Dhabi’s position as a centre for institutional investment and support the acceleration of non-oil economic growth. By channelling institutional capital into “productive” sectors, the platform will contribute to gross domestic product diversification and employment creation, the two companies said.
Arvind Ramamurthy, chief of market development at ADGM, said the move reinforced Abu Dhabi’s position as a “trusted destination” for real asset investment.
“This partnership … will further expand access, deepen market maturity and connect global investors with the region’s most compelling opportunities,” he added.
With Dh47 billion ($12.8 billion) of real estate assets under management, Aldar has previously partnered with global investors including Apollo Global Management, the Carlyle Group and Ares Management Corporation to allocate capital to real estate opportunities.
The launch of Aldar Capital marks the execution of a “key growth driver” towards its 2030 strategy to reach Dh20 billion in annual net profit, the developer said.
Mubadala Capital administers over $430 billion in assets through its asset managers and strategic partnerships.
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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.”
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