The new entity will reportedly have combined assets of over $200 billion
Last week, Mubadala Investment Co and Abu Dhabi Investment Council (ADIC), the two sovereign wealth funds of the UAE’s capital emirate, announced a mega deal.
UAE President Sheikh Khalifa bin Zayed Al Nahyan issued a law that resulted in ADIC becoming part of Mubadala. According to Reuters, the new entity has a combined portfolio of over $200 billion. At the end of June last year, Mubadala reportedly had assets worth Dhs465.5 billion and made a net profit of Dhs4.2 billion in H1 2017. The Sovereign Wealth Fund Institute values ADIC’s assets at $123 billion and Mubadala’s at $127 billion.
ADIC began operation in 2007 as a means to invest internationally the emirate’s earnings from oil exports. Its current executive director Eissa al-Suwaidi will continue in his role, although the ADIC board would now report to Mubadala. The chairman of Mubadala is Sheikh Mohamed bin Zayed Al Nahyan, the crown prince of Abu Dhabi. “An investment vehicle of such scale will enhance the country’s competitive position,” said Sheikh Mohammed bin Zayed on Twitter.
In 2016, Mubadala merged with International Petroleum Investment Company. Apart from giving Mubadala a diverse portfolio – less than 20 per cent of Mubadala’s investment were energy-focussed prior to that merger whereas IPIC’s investments were primarily focused in that area – the merger also reportedly resulted in 20 per cent overall cost saving.
ADIC’s portfolio includes First Abu Dhabi Bank, the UAE’s largest bank as well as Abu Dhabi Commercial Bank. ADIC has a 33.4 per cent stake in First Abu Dhabi Bank and a 62.5 per cent stake in ADCB. ADIC’s other investments include Al Hilal Bank, a Sharia-compliant lender that it founded, and a 50 per cent stake in Union National Bank.
This is not the only big financial news coming out from Abu Dhabi. Last week, Abu Dhabi’s Aldar Properties of which Mubadala holds around a 30 per cent stake announced that it was entering a JV with Dubai’s Emaar Properties to build projects nationally and internationally worth about Dhs30 billion.