Mubadala is set to sell down in “legacy commodity sectors” and deploy capital into disruptive industries in technology and healthcare, group chief executive Khaldoon Al Mubarak said at the weekend.
Global SWF’s database shows that the Abu Dhabi sovereign wealth fund has already accelerated direct private equity transactions with a surge in venture capital led by a growing number of early stage investments. The Covid-19 pandemic has boosted its interest in expanding its globa tech and l healthcare portfolio, with a focus on early-stage innovators – and it has overhauled and restructured its organization to elevate disruptive investment in its business model.
In addition to its own direct investments, Mubadala stumped up 15% of the US$100 billion SoftBank Vision Fund, which specialised in emerging technologies, including disruptive startups in real estate, retail and transportation and ended its investment activity in 2020.
Our data shows Mubadala made 23 direct private equity transactions worth US$10.6 billion in 2020, of which US$6.3 billion was committed to strategies overseen by Apollo, Silver Lake and Barings - this is in addition to its allocations to other private market segments, such as real estate and infrastructure. Of the remaining 20, 14 were venture capital and mostly in Series A to C funding rounds. The trend so far in 2021 has seen further focus on early stage VC at a rate of one investment per week, implying a potential doubling of private equity transactions this year.
Global SWF’s 2021 Annual Report noted that in 2020 Mubadala tilted heavily towards biotech with a US$ 235 million private placement in German drug discovery company Evotec, which is developing antibodies to treat COVID-19. In fintech, the fund aimed for earlier stage investments in tech-enabled insurance broker Gabi and home-grown MidChains.
Mubadala is not just diversifying in terms of sectors, but also geographically as it sees India and China offering the best growth potential in tech and healthcare. The US$1.2 billion allocated to Jio Platforms, Reliance Industries’ digital arm last year, was a strong indication of the direction of travel for the Middle Eastern fund as it seeks exposure to India’s rapid digitalization.
Yet, it is retaining its exposure to developed markets and last month pledged billions in investment in the UK over the next five years, including US$1.1 billion in life sciences. Mubadala has already made some tentative first steps into the UK’s life science sector. In November, it took a stake in Envision Pharma Group, which enables pharma and medical device companies to commercialize products through medical strategy and communications..
At the same time, Mubadala’s exits in 2020 included chunky stakes in Energias de Portugal, Borealis, Aldar Properties, Unicredit and Torresal Energy – together valued at nearly US$11 billion. It is now driving towards IPOs in Emirates Global Aluminium, satellite company Yahsat and chip-producer GlobalFoundries.
For sure, Mubadala's plans to continue its acceleration in venture capital will make the Abu Dhabi fund one of the most exciting state-owned investors in the years ahead.
