Interview: Khaldoon Khalifa Al Mubarak
How is the current era of lower oil prices framing Mubadala’s strategic direction, and how has it impacted investment strategy?
KHALDOON KHALIFA AL MUBARAK: Like any active global investor, we must prudently manage our portfolio through challenging conditions. There is no doubt that 2015 was a difficult year from a macro-economic perspective. While the oil and gas sector represents less than 20% of our portfolio, there were pressures on equities and commodities as well. But our investment strategy, and our mandate, is long-term. Tough economic conditions didn’t prevent us from making opportunistic investments and we will continue to look for those opportunities.
Our strategic priorities remain consistent. We were set up by the government of Abu Dhabi in 2002 to be an engine for economic diversification and social infrastructure development for the UAE, and this period of volatility reinforces the importance of our long-term mandate. The industry clusters we are developing are creating tens of thousands of local employment opportunities, enabling private sector participation in the UAE’s economy. This, ultimately, helps to make the UAE globally competitive across multiple fronts.
We also achieved significant milestones in 2015, including the opening of the region’s most sophisticated hospital, Cleveland Clinic Abu Dhabi, which accelerated development of Al Maryah Island, now home to Abu Dhabi Global Market and a new Four Seasons hotel.
In the current economic climate, is there even greater impetus to engage the private sector in the diversification process?
AL MUBARAK: Cultivating partnerships with some of the world’s leading organisations has always been at the heart of Mubadala’s strategy. Our partnership approach has enabled the creation of globally integrated industries that are establishing the UAE’s position across key value chains. For example, the Nibras Al Ain Aerospace Park is home to businesses that have partnered with the likes of Airbus, Boeing and GE, forming part of global supply chains and service networks. As these businesses grow, there are ever-increasing opportunities for new companies to join the ecosystem.
In the metals sector, we jointly own Emirates Global Aluminium (EGA) in partnership with Investment Corporation of Dubai. EGA is now the world’s fifth-largest aluminium producer, connecting the UAE to more than 75 countries and 350 customers. Just as importantly, the company is anchoring the growth of the local aluminium sector and an associated industrial cluster.
As the UAE’s new sectors gain momentum, there is a clear opportunity for active private sector participation and, ultimately, full private ownership.
How would you assess the importance of the ICT sector for Abu Dhabi, and what role does Mubadala Development Company play in this?
AL MUBARAK: Ensuring that Abu Dhabi has advanced, future-ready ICT infrastructure is a mission-critical enabler for the UAE’s rapidly growing knowledge-based economy, which in turn presents Mubadala with the opportunity to be a global supplier of ICT services.
For example, Yahsat, our 100%-owned satellite communications company, has two geospatial satellites providing government and commercial broadband, broadcast and communications services across the Middle East, Europe, Africa and central and southwest Asia. The company’s third satellite will be ready for launch in 2017 – extending coverage to 95% of Brazil’s population and to an additional 19 markets across Africa, reaching 60% of the continent’s population.
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