A visionary UAE investment titan grows stronger
▶ Mubadala’s diversified portfolio is a good indication of where the Emirates’ future growth lies
When Covid-19 struck the world more than two years ago, it hit markets with one of the most severe, unexpected economic shocks in modern history. Now, just as things have tentatively started to look up in many parts of the globe, the Ukraine invasion this February has brought severe sanctions, shortages and uncertainty to an already fragile situation. Whether for those managing household finances or those overseeing multi-billion dollar sovereign wealth funds, current market conditions are some of the toughest in decades.
It is, therefore, notable when a financial institution performs well. Earlier this week, it was announced that the income of Abu Dhabi’s Mubadala Investment Company surged by almost 70 per cent in 2021, a record in its 20-year history.
In remarks to The National, the group’s chief executive, Khaldoon Al Mubarak, said: “It’s the progress we’ve made in the last 20 years that makes me enthusiastic for the decades ahead.” The assets under the company’s management climbed beyond the trillion-dirham mark, reaching Dh1.04tn at the end of 2021.
More widely, it forms part of a sometimes counter-intuitive lesson in how investors should navigate the tough currents of global markets at their worst. While the instinct in adverse times might tend towards caution, it would go against what many skilled investors in history have advised. American entrepreneur Robert Arnott once said, “In investing, what is comfortable is rarely profitable.”
Mubadala has clearly learnt the value of that approach. In 2020, during the height of the pandemic, it invested more than $11 billion.
John Bogle, another American investor, counselled: “Don’t look for the needle in the haystack. Just buy the haystack!”
Lightheartedly, he advocated a trend increasingly prevalent in venture capital today: widely funding new ideas and startups in the hope that while many might fizzle out, one will excel.
In this analogy, Mubadala has bought a big haystack, but this time with many needles. It has invested heavily in the UK and France, with major new partnerships announced last year for both countries.
Closer to home, the firm is focusing on crucial sectors, particularly health care and sustainable energy. Because of it, the UAE has new healthcare infrastructure and a future where increasingly clean, cheap and reliable electricity is remarkably close for a country so long built on oil revenues. Even deeper, it has a more sophisticated domestic economy that will diversify the economy, a key long-term objective of Mubadala and the country’s wider government.
In a 2020 profile, Mr Al Mubarak spoke to the The Wall Street Journal of being on the phone “all the time” in the early months of the year, asking the world’s leading investors what they predicted the economic consequences of Covid-19 to be. The surprising consensus was not just that things would recover surprisingly quickly, but that in the thick of the hardship lay great possibilities. By seizing on that informed hope, Mubadala’s resilience can be a lesson for investors in even the most difficult of times.