Emirati and Canadian funds are following a similar pattern in Europe, pledging big capital injections in infrastructure following top-level bilateral diplomacy.
Emirati and Canadian funds have tended to focus their attention on the UK as the preferred target of investment in the region, but the recent interest suggests Germany will be the next focus of investment, while the approach towards Greece is likely to be similar to neighbouring Turkey where funds are beginning to make their mark in infrastructure and venture capital.
Abu Dhabi funds are seeking to build on a declaration signed in 2021 seeking cooperation agreement on foreign policy and defense issues. According to the Greek press, Athens is luring ADQ into investments in infrastructure, including Iraklio port in Crete, logistics, airports and roads. It is also reportedly looking at renewables and pharmaceuticals. ADQ signed a EUR4 billion strategic investment agreement with the Hellenic Development Bank and the Hellenic Development Bank of Investments in May 2022. Masdar, which was established by Mubadala and is now part-owned by ADQ, is also examining wind farms as well as green hydrogen, desalination units powered by renewables, and energy storage projects. Mubadala has also pledged investment in fisheries and tourism and is reportedly examining shipping and healthcare assets.
A leader in Abu Dhabi’s bilateral Mubadala has proven to be active in pursuing its Country Direct Investment Programs and working towards its targets, and puts its money where its mouth is. Last year saw Mubadala pledge huge resources to tech and natural resources in the UK, with a commitment of GBP10 billion (US$14 billion) over 2021-26. Since the UK program was launched, there has been a steady stream of investments by Mubadala, amounting to around US$4 billion – 29% of the pledged amount over the five-year program.
Meanwhile, Canada’s vast public pension funds sector is looking to plunge billions into Germany's infrastructure following a meeting with German chancellor Olaf Scholz this month. IPE reported that CDPQ, OTPP, CPP and OMERS were examining infrastructure and healthcare sectors.
Canadian funds often co-invest in the same transactions, such as the acquisition of Germany-based ceramics producer CeramTec by PSP and OTPP in 2017 and the acquisition of Techem, a German global sub-metering service, by CDPQ and OTPP in 2018. OTPP has also invested in Lowell, Synlab, Taxfix, Trade Republic, and Veonet, which are largely focused on fintech and healthcare sectors.
This year, OMERS has been active in venture capital investments in Germany, including a Series B funding round in fintech startup WeFox alongside Mubadala. It also participated in a Series A round in cloud platform Next Matter. Last year, OMERS bought a 37.5% stake in Amedes Group, a provider of medical diagnostics services in Germany, Belgium and Austria, alongside Goldman Sachs and AXA. OMERS has also bought the Sony Centre in Potsdamer Platz in Berlin together with private equity firm Madison.
Global SWF has previously cast doubt on whether multi-billion dollar bilateral announcements ever get fulfilled. Whether Canadian or Emirati, the involvement of multiple funds with pre-existing involvement and experience makes such ambitions more realistic.