Mubadala named 'Fund of the Year' for global partnerships and investment activity

Abu Dhabi's strategic investment arm, which went on a deals spree in 2021, recognised by Global SWF

Mubadala's assets under management have grown to $243.6 billion. Photo: Mubadala

Mubadala Investment Company has bagged the global sovereign wealth fund industry’s top honour, becoming the “2021 Fund of the Year”, a recognition of its investment acumen and the part it has played in helping the industry to grow last year despite headwinds.

The award, from industry tracker Global SWF, is also an acknowledgement of the Abu Dhabi strategic investment arm’s high level of deal activity in 2021, partnerships it has forged with governments and investment entities across the globe, and the crucial role it has played at home in the economic recovery.

“For its significant contribution to the development of Abu Dhabi and the UAE, for its leadership in pursuing global partnerships, for its unparalleled investment and divestment activity displayed throughout the year, and, in general, for its contribution to the advancement of the SWF industry, Global SWF believes that Mubadala Investment Company is a worthy recipient of the 2021 Fund of the Year award,” said Diego Lopez, Global SWF managing director.

Mubadala, which invests on behalf of the Abu Dhabi government and has $243 billion in assets, is central to the emirate’s economic diversification drive.

The fund, which invests at home and abroad, aims to double the size of its portfolio in the next decade, Ahmed Al Calily, Mubadala’s chief strategy and risk officer, said in an interview with SWF Global this week.

Mubadala’s organisational structure, strategy and global partnerships enables the fund to invest in sectors with significant “tailwinds”, including technology, life sciences, renewable energy and FinTech. It continues to seek opportunities in “more traditional sectors”, he said.

“As a responsible investor, we are committed to supporting the economic diversification of Abu Dhabi while leaving a positive lasting impact on the communities where we invest worldwide,” Mr Al Calily said.

The global economy, which in 2020 tipped into its worst recession since the 1930s, has rebounded strongly, helped by more than $25 trillion in monetary and fiscal support pumped into it by central banks and governments around the world.

Despite headwinds and continued pandemic-driven uncertainties, sovereign and public pension funds managed to boost their assets under management to a record $31.9tn in 2021. Assets held by sovereign wealth funds rose 6 per cent to $10.5tn during the year, while those managed by public pension funds climbed 8.7 per cent to $21.4tn, the SWF Global annual report showed.

Mubadala expects challenges in the short term from the pandemic, rising interest rates and inflation. However, it does not plan to change the company’s investment strategy and its view on sectors it invests in, chief executive Khaldoon Al Mubarak said at the recent Global Manufacturing and Industrialisation Summit in Dubai in November.

“When I look at 2022, for us as Mubadala … there’s no shift in terms of our strategy, in terms of themes in which we are investing in [and] in terms of how we look at the next five- to 10-year cycle,” he said.

The company is a long-term investor that takes a “patient” approach to investing and it will continue to focus on strategic sectors including technology and life sciences and expand its portfolio of renewable and energy transition assets, Mr Al Mubarak said at the time.

Mubadala’s comprehensive income in 2020 soared 36 per cent to a record Dh72 billion ($19.6bn) in 2020 from Dh53bn a year earlier, as it navigated its portfolio through one of the toughest years for the global economy in decades. Equity and fund investments as well as growth of assets across sectors drove income.

“2020 was one of our most successful years, during which we achieved record investments, profit and growth. We deployed $29.4bn while realising $28.3bn through monetisations and distributions,” Mr Al Calily said. “2021 was also one of our most active years.”

The fund’s investments in 2021 included its private equity deal with the world’s largest asset manager BlackRock and a $2bn co-investment pact and purchase of a minority stake in Silver Lake.

Through its platforms and subsidiaries, Mubadala invested in assets from K-MAC Enterprises, the second-largest Taco Bell franchisee in the US, enterprise software company Medallia, and Russia’s largest petrochemicals company Sibur.

In July, Mubadala invested $250 million in US biosimulation software company Certara and in March, the fund agreed to plough £800m into Britain's life sciences industry over the next five years as part of a £1bn deal between the UK and the UAE. The UK's Life Sciences Investment Programme, which was unveiled last year, will contribute £200m to the deal.

It also signed a preliminary agreement with Italian shipbuilder Fincantieri to start potential collaborations in the field of advanced technologies and services in the naval, marine and industrial sectors. Mubadala also signed two agreements to increase investment in priority sectors in France during President Emmanuel Macron’s visit to the UAE.

In the region, the fund signed a preliminary agreement with Bahrain’s sovereign wealth fund Mumtalakat to explore co-investment opportunities in different parts of the world.

Mubadala’s asset monetisation last year included the $953m partial sale of its stake in Aldar, one of the largest private share purchases in a UAE-listed company, the $731m initial public offering of Yahsat — the first listing of a Mubadala portfolio company on the Abu Dhabi Securities Exchange — and the $2.6bn share sale of Globalfoundries on the Nasdaq, one of the largest initial public offerings of 2021.

In December, Mubadala also reached a deal with US-based Stonepeak Infrastructure Partners to sell its share in data centre company Cologix for an undisclosed sum.

The company's portfolio of investments spans five continents, with interests in aerospace, information and communications technology, semiconductors, metals and mining, renewable energy, oil and gas, and petrochemicals.

Last year, the fund reorganised its structure along four lines of business — UAE investments, disruptive investments, direct investments and real estate and infrastructure — that has set the foundations for its next phase of growth.

At home, it holds stakes in Emirates Global Aluminium, aerospace manufacturing company Strata, Yahsat and green energy company Masdar.

The fund remains focused on the growth of its portfolio companies in the UAE and is looking at investments and building partnerships in life sciences and high-tech manufacturing sectors, Badr Al Olama, head of Mubadala’s UAE clusters, told The National in November.

Mubadala intends to make its UAE portfolio companies “not just national, but global champions”, and is pushing for scale to expand beyond the UAE, he said. He added that it is important to expand the footprint, considering the competitive global environment.

The fund is also seeking investments in energy transition, primarily in green hydrogen, where it is exploring different investment options. In January last year, Mubadala, Abu Dhabi’s holding company ADQ and state-controlled Abu Dhabi National Oil Company formed a hydrogen alliance to develop the emirate’s hydrogen economy.

Last year, Mubadala also welcomed Adnoc and Taqa as joint shareholders in Masdar, in a move that will help increase the clean energy company's renewable power capacity to more than 50 gigawatts by 2030. The deal will help make it a “global champion in renewables and green hydrogen” and will accelerate progress towards the UAE’s strategic goal of achieving carbon neutrality.

In December, Mubadala joined forces with Group 42, the artificial intelligence and cloud computing company, to set up a biopharmaceutical manufacturing campus (Biopharma Campus) in the UAE capital.

In the same month, Mubadala and Abu Dhabi Investment Office signed a preliminary agreement with Roborace to accelerate the development of the mobility sector by using autonomous technologies and metaverse infrastructure to boost wider adoption of these innovations.

“As we progress with our activities and ambitions, we will continue to align ourselves with the Economic Vision 2030 including supporting a large, empowered private sector, maintaining strong and diverse international relationships and optimising the UAE’s resources,” Mr Al Calily said.