Abu Dhabi wealth fund Mubadala sees more opportunities for China growth, investments

23-Mar-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

Investors should not have to choose between China and the US as tensions rise between the world’s two largest economies, according to Khaldoon Khalifa Al Mubarak, group chief executive of Mubadala Investment Company.

The Abu Dhabi sovereign wealth fund is a long-time investor in American companies and has stakes in Chinese technology unicorns SenseTime Group and Didi Chuxing Technology as part of its growing portfolio in Asia.

“Have we been pressured? No,” Al Mubarak said on the sidelines of the Bloomberg Asia Invest conference in Hong Kong. “We are one of the countries that is uniquely positioned because we have very strong ties to both countries, based on ties to both economies and have been actively investing in both. To be honest, we will continue to do that. I don’t see any reason to shift from that approach.

“We continue to believe in the US economy, we continue to believe in the opportunities in the US. We will continue to grow there. And we’re excited about Asia and we’re excited specifically about China.”

Mubadala was created in 2017 by the merger of Abu Dhabi’s International Petroleum Investment Company and Mubadala Development Company.

The company has investments in over 50 countries across 15 sectors, ranging from aerospace to health care to semiconductors, and total assets of 832 billion Emirati dirhams (US$226.5 billion).

Mubadala is a more recent investor in Asia, after years of seeking opportunities in North America and Europe.

The company created a $10 billion fund with China Development Bank Capital in 2015 for investments in China and the United Arab Emirates.

It also agreed in 2017 to invest $15 billion in the Softbank Vision Fund, which has bought stakes in ride-sharing company Uber, messaging app Slack and shared workspace provider WeWork.

“China, it’s been a newer space for us,” Al Mubarak said. “Over the last couple of years, that is where we have been opening up to investing in Asia in that space and specifically in China with partners such as Softbank and others. By doing so, that’s opened up our eyes to the opportunity. What we’ve found is very interesting companies, very interesting opportunities [and] very exciting growth trajectories.”

Mubadala recently halted conducting new business with Goldman Sachs after suing the investment bank last year over the 1Malaysia Development Berhad (1MDB) investment fund scandal in Malaysia.

The Malaysia government has accused several Goldman Sachs units of misleading investors in raising money for 1MDB and brought criminal charges against several former Goldman officials.

“Any organisation that was involved in this, we have to and we are and continue to do what we need to do to preserve and protect our interests,” Al Mubarak said at the Bloomberg conference.

Mubadala’s mission is built around diversifying the UAE’s economy beyond the oil and gas industry, which accounts for less than 30 per cent of its gross domestic product.

Al Mubarak, who also is the chair of the English football club Manchester City, said that many of the companies Mubadala is looking at are potential partners for future growth in the Middle East and North Africa, with Abu Dhabi serving as a gateway to the region.

Many of these companies don’t know the region very well,” he said. “By having an investor, such as ourselves, that is an investor in these companies, but at the same time knows the region extremely well and has a strong track record in the region, I think that’s a good fit for both.”

Much of Mubadala’s investment in China has been focused around the tech space, particularly disruptive technology, but Al Mubarak said he expects the company’s portfolio to reflect more balance across other sectors as it continues to invest in the mainland and other parts of Asia.

“We’re putting in more capital. We’re looking at it directly. We will continue to invest through the Softbank Vision fund in this space. I can’t put a dollar number on it. That really depends on the opportunities,” Al Mubarak said. “What I can say is we have the appetite to considerably increase our capacity in this region.”



Category: China

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