MUBADALA LOOKS TO TECHNOLOGY AND HEALTH CARE FOR GROWTH
▶ Chief executive says company remains focused on boosting its investment in China and India
Mubadala Investment Company is looking to diversify its asset base as it continues to pivot to disruptive industries and focus more on technology and health care.
A shift in the fund’s strategy means more selldowns in “legacy commodity sectors” either through market listings or private placements, group chief executive Khaldoon Al Mubarak told the Financial Times.
The company’s asset diversification and revenue-generation strategy includes its previously announced initial public offering for Emirates Global Aluminium, the UAE’s biggest industrial company outside the oil and gas sector.
Also on the cards are the listings of satellite company Yahsat and US chip maker GlobalFoundries, according to the report.
Mr Al Mubarak stressed that Abu Dhabi-based Mubadala, which has an asset base of $232 billion, remains focused on raising its investment in China and India.
“The sectors we like all have a significant growth trajectory in China and, if you look at the overall portfolio and the percentage of coverage we have in China, it is nowhere near where it should be,” said Mr Al Mubarak.
“The same applies for India.” After investing $1.2bn in Jio Platforms, the digital business unit of India’s Reliance Industries, Mr Al Mubarak said last June that Mubadala was keen to explore further opportunities in India, China and other South-East Asian markets. The sovereign wealth fund is predominantly interested in the technology sector, especially segments focused on medicine, artificial intelligence and agriculture in Asia.
The Covid-19 pandemic has hastened Mubadala’s switch to new technology as it boosts its investment in clean energy, life sciences, mobility, automation, robotics and connectivity.
The way the company operated, invested and looked at potential opportunities has changed and will continue to evolve as Covid-19 subsides.
Even before the pandemic, Mubadala was investing more in technology and the Covid-19 outbreak proved that it was “on the right path” in its shift from the traditional investment model, Mr Al Mubarak told the Global Manufacturing and Industrialisation Summit in September last year.
“What Covid-19 has done, essentially, is supercharged that move [to diversify],” he said at the time.
Earlier this year, Mubadala reorganised its structure along four lines of business – UAE, property and infrastructure, disruptive and direct investments. It expects the new operating model to propel it into the next phase of growth.
Mubadala invested more funds and “monetised” more assets last year than the highs it hit in 2019, when it invested $18.5bn and raised $17bn through divestments, Mr Al Mubarak told the Financial
Times. He said that the company’s annual results in June would reveal higher income.
Mubadala, an anchor investor in SoftBank’s Vision Fund, made a $2.4bn commitment towards a partnership with US private equity firm Silver Lake last year.
Last week, Group 42, an Abu Dhabi artificial intelligence and cloud computing company that counts Mubadala among its shareholders, received a “significant” investment from Silver Lake.
Mubadala said in March that it would invest £800 million ($1.1bn) in Britain’s life sciences industry over the next five years, as part of a £1bn Sovereign Investment Partnership between the UAE and UK.
The remaining £200m will come from the UK’s Life Sciences Investment Programme that was unveiled last year.
“We are not going to take a pause, the momentum is there and it is the whole point with this shift in the portfolio,” Mr Al Mubarak told the newspaper. “I am not saying we are going to completely exit headwind sectors, but the strategy of redeployment and rebalancing our portfolio strategy . . . has proved to be successful”.
Within the UAE, Mubadala’s focus is on the development of new industries in the country where “we can ... be competitive globally and where we can have scale”.
“It is that next industrial play. Life sciences, that is a sector we know is going to be growing immensely and we have the sort of competitiveness in that space where we can create the right industries here,” said Mr Al Mubarak. “Technology is [another] area we are very strong in.”
Mubadala’s asset diversification and revenue-generation strategy includes the listing of EGA