Alpha Dhabi to invest $2.5bn in Abu Dhabi venture fund

The investment vehicle is earmarking growth-stage private companies globally across sectors including AI, FinTech and life sciences

Abu Dhabi-listed Alpha Dhabi reported a sharp rise in its 2022 first-quarter income as revenue and assets rose. Photo: ADX

Alpha Dhabi Holding, a subsidiary of Abu Dhabi's International Holding Company, has made a Dh9.2 billion ($2.5bn) commitment to invest in a venture fund that will focus on investments in growth-stage companies globally.

The Alpha Wave Ventures II, launched by Chimera Capital and Alpha Wave, will receive a capital contribution of Dh2.6bn and undrawn capital commitment of Dh6.6bn, which will be drawn down over the investment period of the fund. Alpha Dhabi revealed the move in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

The fund, which was launched earlier this year, has already started to make investments.

With its global remit, the investment vehicle is prioritising private companies with a particular focus on growth-stage businesses across sectors including artificial intelligence, FinTech and life sciences.

"Investment in innovation and technology remains a core tenet of our growth strategy at Alpha Dhabi," Hamad Al Ameri, chief executive of Alpha Dhabi, said. "We continually look at investments in disruptive technologies as a means of advancing our group of operating subsidiaries, which include market leaders in their respective sectors.

“As a cornerstone and significant investor in this fund, we are able to firmly demonstrate this commitment to innovation, technology and growth-stage companies, while also adding scale to our investment portfolio and delivering superior returns for our shareholders.”

AI is expected to add 14 per cent to the world’s gross domestic product by 2030, equivalent to $15.7 trillion, according to business consultancy PwC. The UAE ranks 19th worldwide on the government AI readiness index, first in the region, according to Oxford Insights.

The Middle East's FinTech sector has also been growing at a compounded annual rate of 30 per cent, estimates by the Middle East Institute suggest. By the end of this year, more than 800 FinTech companies operating in segments, including payments, InsureTech and cyber security, are expected to raise more than $2bn in venture capital funding, it said.

The Alpha Wave Ventures II fund will focus on investments in businesses that provide innovative technology solutions to major problems being faced regionally and globally.

The fund’s investment focus is in line with its own growth strategy of investments in disruptive technologies as part of the UAE’s ambition to create a tech-enabled competitive economy, Alpha Dhabi said.

The investment commitment underlines efforts to scale the company’s portfolio of assets by adding sectors and geographies, while providing Alpha Dhabi with "considerable deal flow and access across key markets including the US".

“It supports our commitment to bring best-in-class technology and innovation to Abu Dhabi and our ecosystem by leveraging synergies and integrating disruptive technologies into our group of operating subsidiaries, thereby enhancing their credentials and offerings,” the company said.

Alpha Dhabi, previously known as Trojan Holding, has grown into a regional conglomerate. It was listed on ADX in June last year and has been on an expansion spree since then.

Last year, the company acquired the entire share capital of Murban Energy, a 70 per cent stake in Mawarid Holding Investment and 100 per cent share capital of Sublime Commercial Investment, through which it holds a stake in Aldar Properties, Abu Dhabi’s biggest developer.

In January, Alpha Dhabi acquired a 25.24 per cent stake in Al Qudra Holding and increased its share in Aldar Properties to 29.8 per cent from 17.5 per cent.

The company also has shareholding in National Marine Dredging Company, Response Plus Medical and Sandstorm Motor Vehicles Manufacturing.

It also invested Dh1bn in Ta'ziz, an industrial service and a logistics organisation, and acquired a hotel in the Chechen Republic.

The company is also teaming up with Abu Dhabi's holding company ADQ as well as e& (formerly Etisalat) and First Abu Dhabi Bank to launch Wio, a new digital banking platform.

Alpha Dhabi's first-quarter net profit climbed to more than Dh1.97bn from Dh100m a year earlier, the company said in April.