Interview : Khaldoon Khalifa Al Mubarak
What are the main ways in which Mubadala is developing its capital allocation strategy?
KHALDOON KHALIFA AL MUBARAK: As an active international investor, we are continually assessing our combined asset portfo- lio and capital allocation strategy in line with our principal goal of delivering attractive commercial returns for our shareholder, the government of Abu Dhabi. This has always been the case, but since the merger of International Petroleum Investment Company and Mubadala Development Company, this mandate has been the main driver of our capital deployment.
Over the years we have built a highly diversified asset portfolio that spans five continents, positioning us well to capitalise on opportunities that a stronger investment climate presents as the global economy gains strength. Looking ahead, however, our strategy will include moving into new sectors and markets, as well as monetising our investments when market conditions are right. It will also see our capital-allocation strategy move to de-risk the portfolio. One of the main ways this will happen is by gaining greater exposure to developed markets that drive attractive and stable income streams.
How is Mubadala’s global investment strategy supporting wider diversification in the emirate?
AL MUBARAK: The Abu Dhabi government’s clear vision for a diversified economy has already delivered tangible results, with the UAE’s non-oil industries now representing approximately 70% of GDP. Furthermore, new industries such as composite manufacturing and communications technology that did not exist in the emirate just a decade ago are contributing significantly to the overall economy.
Mubadala remains at the heart of this story. We have been a catalyst for the development of new sectors and ecosystems that align with the government’s wider strategic vision in areas such as aerospace, health care and ICT, and industries like aluminium smelting, semiconductors, pharmaceuticals, agribusiness that drive the development of the local economy. Take Emirates Global Aluminium , which is developing a bauxite mine in Guinea: this is an attractive commercial deal, but also one that secures the global supply chain for one of our national industrial champions, creating jobs and skills for the benefit of the local economy.
It’s always been our goal to build partnerships with leading global firms, and in turn create knowledge-transfer opportunities in new and dynamic industries. Across our entire portfolio, and with the new investments we make, we are always exposing the local workforce to new ideas, experiences and innovative approaches that add to wider diversification.
How are risks associated with investing in technology being mitigated, and in what ways can innovation support these industries domestically?
AL MUBARAK: We are not deterred by risk; rather, it enables us to weigh up investment decisions and deliver returns. For example, through our recently opened San Francisco office, we are getting closer to the venture-capital community, which provides exposure to some of the most exciting investment opportunities internationally. We want to gain exposure to sectors and markets that are shaping the future global economy. We’re able to do this because we have a team of highly experienced people who have deep investment and asset-management expertise. But equally, the technology start-up space is relatively new for Mubadala, so the partnerships we have forged are an important part of our strategy. The SoftBank Vision Fund, for example, to which we have committed $15bn, is a major capital deployment that provides exposure to a wide range of highly innovative companies in the tech sector. These investments are oriented towards delivering attractive financial returns, but they also stimulate significant opportunities for local talent to drive innovation in related industries closer to home.
