From electricity, property development and hospitals to billboards, driving schools and chicken farms, one vast conglomerate lies behind much of Abu Dhabi’s domestic corporate landscape: International Holding Company.
IHC has grown rapidly in recent years and now boasts roughly 1,500 subsidiaries, according to chief executive Syed Basar Shueb, with interests — and influence — across the emirate’s rapidly growing economy.
“We are looking to consolidate sector by sector,” Shueb told the Financial Times.
IHC’s assets stand at more than $125bn — a figure the group, chaired by deputy ruler Sheikh Tahnoon bin Zayed al-Nahyan, wants to almost double over the next five years and a far cry from just seven years ago when it was a virtually unknown entity invested in fish farming and real estate.
However, experts in the Gulf’s political economy say the rapid rise of IHC reflects a blurring of lines in the emirate between royal and state assets, as well as a lack of transparency.
The concentration of economic heft in the hands of royalty makes the emirate “an interesting hybrid of hyper-modern and completely patrimonial”, said Steffen Hertog, an associate professor at the London School of Economics.
Karen Young, a senior fellow at Washington-based think-tank the Middle East Institute, said IHC’s grip on Abu Dhabi’s economy could lead to some “crowding out” of the private sector. The group’s subsidiaries own a bevy of local entities, including hotels and a vegetable oil producer.
IHC told the FT in October it planned to double its then $119bn asset base — its total as of the end of June — over the next five years. By the time it reported its third-quarter results in November, the figure had hit $126bn.
However, bankers privately express doubt about the valuations of its holdings, many of which were originally transferred for free from parent company Royal Group, also Sheikh Tahnoon’s company. There is no independent bank research on IHC, nor is it rated by any credit agencies.
“The ruling family in Abu Dhabi, bloated off the back of decades in oil rents, had all these bits and pieces in the private sector but they weren’t really joined up,” said Christopher Davidson, an academic writing a book on IHC. “A national champion was needed to streamline this into something more coherent and aligned with diversification objectives.”
While IHC has helped rationalise various royal holdings, Davidson added, its “market concentration is off-putting to many outside investors” who might otherwise consider stakes in Abu Dhabi’s companies.
IHC’s $240bn market capitalisation makes it by far the biggest constituent of the Abu Dhabi stock exchange, taking up 41.5 per cent of the FTSE ADX General Index — a figure that rises still further when listed subsidiaries such as Alpha Dhabi and 2PointZero are included. First Abu Dhabi Bank, the country’s largest lender and runner-up at a 10 per cent weighting, is also chaired by Sheikh Tahnoon.
Because IHC is ultimately controlled by Sheikh Tahnoon, who is also the UAE’s national security adviser and chairs two of Abu Dhabi’s sovereign wealth funds, academics classify it as a “state-related entity”. Its spread across the economy comes despite an economic master-plan drawn up by the oil-rich emirate in 2008 in which the first of nine pillars for success was a “large, empowered private sector”.
As economic activity unrelated to the oil industry has grown, now accounting for more than half the emirate’s GDP, one of the world’s richest cities by sovereign wealth has become a magnet for hedge funds, asset managers and millionaires setting up family offices at its offshore financial centre.
However, scholars and business people say domestic economic development is driven by companies controlled by the same royals who run the emirate or by those owned by sovereign investors such as ADQ, chaired by Sheikh Tahnoon, and Mubadala. Some private company executives complain the game is rigged against them.
One UAE-based executive described Abu Dhabi as “a very modern monarchy that really behaves like a conglomerate — someone handles finance and investment, another handles tech”. For the emirate, they said, “a company is a means rather than an end”.
Unlike neighbouring Dubai, which has modest oil reserves and a thriving private sector, Abu Dhabi’s crude-based wealth blunted the need for economic diversification, with its ruling family “way more present in the economic system”, the executive added.
One senior executive at an Emirati company said the situation was also the result of complacency among traditional business families in Abu Dhabi, which were “in their comfort zone for a long time . . . They didn’t want to take a risk of doing things differently”. Nevertheless, he said, “it’s not right you run the economy yourself 100 per cent — any private sector cannot compete”.
Today Abu Dhabi is further reducing its reliance on oil exports, with strong non-oil growth in recent years and investment in emerging technologies such as artificial intelligence. In the first half of the year, Abu Dhabi’s non-oil sectors collectively grew 6.4 per cent against the same period in 2024, according to official statistics.
But even as it pursues diversification, Abu Dhabi’s commitment to an independent private sector has waned, according to Kristian Coates Ulrichsen, Middle East fellow at Rice University’s Baker Institute in Texas.
Grand plans in the Gulf states “can be overtaken by new developments in emerging sectors”, he said, citing AI as an example. These “provide opportunities for state-linked entities to move rapidly and become market leaders, able to mobilise capital and leverage networks that crowd out private sector involvement.”
Another Sheikh Tahnoon-controlled group, G42, has taken the lead on AI, a technology Abu Dhabi has helped finance in an effort to position itself as a regional hub. An IHC subsidiary, Emircom, is a big contractor to data centres.
Some businesspeople cite healthcare as an example of how sovereign and royal-connected investors dominate whole sectors. PureHealth, the UAE’s biggest healthcare network, is largely owned by sovereign investor ADQ and IHC subsidiary Alpha Dhabi. Another major provider, Burjeel, is partly owned by IHC. Meanwhile, M42, a company co-owned by sovereign investor Mubadala and G42, owns Abu Dhabi’s Cleveland Clinic hospital.
Although Abu Dhabi’s sovereign wealth funds buy into private companies around the world, their home market is characterised by what bankers call “left pocket-right pocket” transactions — deals between sovereign investors and state-connected, royal-controlled entities. For example, IHC recently sold its entire 42.5 per cent stake in developer Modon Holding to government-owned L’imad Holding Company.
Opportunities do exist for international private sector companies to partner with state or royal-connected corporations. Microsoft is working closely with G42, having bought a minority stake in the company last year. BlackRock is partnering with IHC on a new reinsurance business.
IHC’s soaring asset base was partly down to companies in its stable growing, Shueb said, although he added that it planned to spend $36bn every 18 months making new acquisitions. It is among big global groups considering a bid for overseas assets owned by Lukoil after the Russian group was hit with new US sanctions.
Regarding criticism that his group could be crowding out the UAE’s private sector, he noted that “54 per cent of our revenue comes from outside the country”, with recent acquisitions set to push that figure closer to 65 per cent.
“We’re all striving for an international business,” he said. “Locally, whatever we can capture, we have captured those things.”
And he insisted IHC did not get special treatment because of its royal connections.
“There is zero preference given to us in any public tender,” Shueb said, adding that the market was “open for everyone”.
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