Despite persistent inflation and geopolitics, Mubadala kept the funding spigot turned on in full, with investments into private credit, AI and more. Image Credit: Bloomberg

Dubai: The assets under management held by the Abu Dhabi wealth fund Mubadala closed 2023 at Dh1.1 trillion, compared to Dh1.01 billion a year ago. During this period, the fund continued to expand its reach into sectors and across geographies, trying to secure pole position as new investment trends came to the fore.

All this in a year marked by 'persistent global inflation and sporadic disruptions to supply chains', said the UAE entity. “Mubadala had a strong year across the portfolio, making investments in areas essential to growth and innovation around the world," said Khaldoon Khalifa Al Mubarak, Managing Director and Group CEO.

During the year, it deployed Dh89 billion into multiple sectors 'shaping the future', including, of course, into AI, digital infrastructure, life sciences and clean energy. Mubadala also expanded its private credit business through some well-honed alliances.

"The company capitalized on market opportunities to execute on its monetization strategy, generating total proceeds of Dh99 billion for the year," said a statement. "Investments to accelerate the transformation of the UAE economy through AI-enabled innovation in sectors such as healthcare and space technology remained central to Mubadala’s strategy."

"Globally, we continue to strengthen our presence and partnerships in key markets...", says Khaldoon Khalifa Al Mubarak, Managing Director and Group CEO. Image Credit: Supplied

UAE investments

In the UAE, Mubadala founded two new businesses along with Abu Dhabi tech group G42.

Space42 is a  space and satellite technology entity, created through the merger of its satellite company Yahsat and Bayanat.

Mubadala and G42 also combined to create M42, a 'tech-enabled' healthcare company. They are also foundational partners in Abu Dhabi’s MGX, an investment vehicle to 'accelerate' the development and adoption of AI and other advanced tech.

America push

One of Mubadala's high-profile investments during 2023 was in Aligned, a data center provider in the Americas. 

Through Mubadala Capital, the UAE fund operator will acquire Fortress, an investment manager and part of the Softbank Group. Masdar, the clean energy firm founded by Mubadala in 2006, closed a 50 per cent stake in the Big Beau combined solar and battery storage entity in California from EDF Renewables North America.

"Globally, we continue to strengthen our presence and partnerships in key markets, ramping up investments across a range of sectors in line with our convictions," said Al Mubarak.

The investment mix

  1. Of the Mubadala portfolio mix, 38 per cent went into private equity, direct and indirect. Another 25 per cent was assigned for public markets and 16 per cent in real estate and infrastructure.
  2. Dh99 billion came through a mix of divestments of certain legacy assets and capital recycling into priority investment areas 'in line with strategy and responsible investing agenda'.

Mubadala's debt load

The UAE entity took on more debt, but in 'prudent' ways.

"We successfully executed almost Dh30 billion of funding commitments obtained across a diverse range of products, strategically issued to refinance maturing debt, and to also to support Mubadala’s investment activities in line with our exciting growth plans," said Carlos Obeid, Group CFO.

"As part of these debt issuances, we successfully executed our inaugural green bond in October following the establishment of our green financing framework to commemorate Mubadala’s decision to align with the UAE’s commitment to Net Zero by 2050.

"We continue to maintain a relatively interest rate immune debt portfolio with a conservative gearing ratio of 10.3 per cent and a strong liquidity position to navigate through this cycle.”

Carlos Obeid
“We continue to maintain a relatively interest rate immune debt portfolio and a strong liquidity position to navigate through this cycle…”, says Carlos Obeid, Group CFO. Image Credit: Supplied
Making headway in Asia
In Asia, GlobalFoundries - which was created by Mubadala in 2009 - opened a $4 billion semiconductor fabrication plant in Singapore. Mubadala also invested in CoolIT Systems, a leading provider of scalable liquid cooling solutions, along with KKR. There was also an investment in Osstem dental care in South Korea.

Subsidiary Mubadala Energy made 'one of the largest natural gas discoveries in Indonesia with the potential of up to 170 billion cubic meters'.

Private credit play

A Mubadala joint venture with US headquartered Ares is to deploy around $1 billion to capitalize on the 'substantial demand' for customized liquidity solutions for the credit secondaries asset class.

With Ares and Abu Dhabi's Aldar, Mubadala plans to jointly invest $1 billion in European private real estate credit. (Ares, an alt-investment firm, and Mubadala have had a partnership since 2017.)

Another long-term partnership Mubadala entered into is with the fund manager Apollo to invest - alongside partners - up to Dh9 billion over the next five years in credit opportunities.