The United Arab Emirates (UAE) continues to assert its economic prowess on the global stage as three of its sovereign wealth funds (SWFs) collectively invested an impressive $36.5 billion in 2023. The data, revealed in the 2024 annual report by Global SWF, a leading tracker of sovereign investment funds, highlights the strategic and diversified investment approach taken by Abu Dhabi’s Mubadala, Abu Dhabi Investment Authority (ADIA), and Abu Dhabi Development Holding Company (ADQ).
Top Performers:
Mubadala emerged as a standout performer, securing the third position in the global SWF rankings with investments totaling $17.5 billion. ADIA closely followed with investments amounting to $13.2 billion. Qatar Investment Authority (QIA) and ADQ secured the seventh and eighth spots, respectively, with investments of $5.9 billion and $5.8 billion.
Saudi Arabia’s Public Investment Fund (PIF) took the lead among sovereign wealth funds, deploying an impressive $31.5 billion in 48 deals, marking a remarkable 33% increase compared to 2022.
Co-Investments Trend:
A notable trend in the region is the rising popularity of co-investments, which surpassed the $30 billion mark for the first time. Mubadala, in particular, focused on reinforcing the UAE’s economic strength through collaborative investments. Partnerships with ADQ and Brookfield in ventures such as Dubai-based payments provider Network International Holdings and US-based Resilience in the biopharma sector exemplify this strategic co-investment approach.
Mubadala’s Strategic Exits:
While actively pursuing new investments, Mubadala has also strategically exited several positions in recent years. The report reveals that Mubadala divested a substantial $122.7 billion between 2018 and 2022, a figure nearly equal to its investments during the same period. Notable exits include holdings from the International Petroleum Investment Company’s (IPIC) portfolio, such as 37% of CEPSA, 64% of Borealis, and 25% of OMV.
Additionally, Mubadala realized returns from the Abu Dhabi Investment Company’s (ADIC) portfolio, including divestments like the Chrysler Building in New York and, more recently, 8% of Abu Dhabi Islamic Bank. Other monetizations have occurred through private placements or initial public offerings (IPOs) of home-grown powerhouses, such as Masdar (partially sold to ADNOC and TAQA), Aldar (partially divested to Alpha Dhabi), and YahSat, which underwent a successful public listing.
Strategic Moves in Healthcare:
In January 2023, the UAE SWF completed a significant transaction, selling 55% of Mubadala Health to G42 for a substantial $2.4 billion. This move not only reflects Mubadala’s commitment to strategic partnerships but also demonstrates the increasing importance of healthcare investments in the region.
The UAE’s sovereign wealth funds have showcased their financial prowess and strategic acumen on the global investment stage in 2023. With a diversified approach, strategic exits, and a focus on collaborative investments, these SWFs continue to play a pivotal role in shaping the economic landscape of the UAE and contributing to the nation’s long-term prosperity.
