After months of negotiations, Abu Dhabi sovereign wealth fund ADQ has forged major investment agreements with its counterparts in Egypt and Turkey as the UAE bolsters its regional economic and political might.
Turkey: Fast-Growing Tech Ecosystem
The US$110 billion Emirati investor signed an agreement with the Turkey Wealth Fund (TVF) to establish a US$300 million venture capital fund aimed at high-growth tech companies in Turkey.
ADQ’s CEO Mohamed Hassan Alsuwaidi said, “Launching Türkiye Technology Fund – ADQ TWF builds on the broader commitment to investing in the future growth of Turkey we made in late 2021 as the UAE and Turkey continue to advance bilateral trade and investment. Turkey is an attractive market with substantial opportunities for investing in vital sectors that align with our areas of expertise.”
The Emirati fund pledged US$10 billion in strategic investments in Turkey in November and also signed a partnership pacts with the Turkey Investment Office to explore opportunities in energy and utilities, healthcare and pharma, agriculture, transportation and logistics.
TVF’s CEO Arda Ermut said the new Turkey Technology Fund is “part of its vision to build a broader US$1 billion technology platform” that “will create a unique added value for our country with its volume and international direct investment dimension and the multiplier effect it will provide for other technology investments.”
The decision to branch out into tech financing indicates the importance Ermut’s leadership is giving to Turkey’s considerable tech potential.
ADQ has already made in-roads into Turkey’s tech VC ecosystem, which it notes saw the highest level of capital raised by local start-ups last year and accounted for 30% of VC transaction volume and more than half of all capital deployed into start-ups across the Middle East and North Africa (MENA), Turkey and Pakistan. In June, ADQ joined Mubadala in a US$550 million Series D funding round for online grocer Getir. In August, ADQ co-led a US$1.5 billion venture capital round for e-commerce platform Trendyol.
Egypt: Expanding into Pharma, Fertilizer and Finance
ADQ also has an intense interest in Egypt with a new office established in Cairo in December Egypt to ramp up its investments in the country and support co-investments with The Sovereign Fund of Egypt (TSFE). The Abu Dhabi state holding company created a US$20 billion strategic investment platform with TSFE in 2019, targeting pharmaceuticals, healthcare, financial services, utilities, agriculture, and real estate.
According to a report this week by Bloomberg, ADQ acquire about 18% of the Commercial International Bank (CIB) for around US$1 billion, as well as shares in Fawry for Banking & Payment Technology Services. The fund is also acquiring Egypt state-held stakes in Abou Kir Fertilizers & Chemical Industries, Misr Fertilizers Production Co. and Alexandria Container & Cargo Handling Co, as Egypt struggles with the impact of the Ukraine crisis on food security and the value of the Egyptian pound.
In September, it formed a consortium with Aldar Properties – a Mubadala portfolio company – to buy a 90% stake in Egypt’s Sixth of October for Development and Investment Company (SODIC), a real estate developer listed on the ADX. The state-owned investor acquired Egypt’s Amoun Pharmaceutical Company alongside TSFE in March 2021. In October 2020, ADQ signed a non-binding agreement with the Middle Eastern Lulu International Holdings (LIHL) supermarket chain, which could invest up to US$1 billion in expansion of operations in Egypt. By establishing an office in Cairo, ADQ indicates its relationship with Egypt will broaden and deepen.