Mubadala’s investments surged by a third last year #UAE #AbuDhabi

Mubadala’s investments surged by a third last year

Investments by Abu Dhabi’s second-biggest sovereign investor Mubadala surged by a third last year, driven by a jump in deals in North America, private equity and artificial intelligence. 

The sharp increase in capital deployment by the now $330bn fund underscores the appetite for deals from Abu Dhabi’s sovereign wealth funds, which were among the biggest sovereign spenders last year and are continuing to bet heavily on the US despite the economic uncertainty since President Donald Trump took office. 

Mubadala made Dh119bn ($32.4bn) worth of investments in 2024, up from Dh89bn the previous year. Industry tracker Global SWF said it was the world’s most active sovereign wealth fund last year. 

The investor’s assets under management also increased 9 per cent to Dh1.2tn in 2024, and Mubadala said it had made a 10.1 per cent annualised return over the past five years, slightly below the 10.3 per cent five-year return rate it reported last year. It does not report returns on an annual basis. 

Chief executive Khaldoon al-Mubarak said the 23-year-old fund’s portfolio had been “constructed to navigate market cycles and scale future-focused sectors — from AI and clean energy to life sciences, semiconductors and advanced manufacturing — all aligned with our national priorities”. 

The standout region for dealmaking was North America, where investments almost doubled year on year, Mubadala said. 

Abu Dhabi has been keen to emphasise its support for the US economy irrespective of the administration, and earlier this year pledged to make $1.4tn worth of investments over the next decade. Trump is scheduled to visit the United Arab Emirates next week. 

AI is a particular focus for Mubadala, which owns 50 per cent of Abu Dhabi’s AI investment vehicle MGX alongside Abu Dhabi AI group G42, chaired by powerful national security adviser Sheikh Tahnoon bin Zayed al-Nahyan. 

MGX last year backed a $30bn AI infrastructure fund, involving BlackRock, Microsoft and others. 

The UAE is positioning itself as a regional hub for AI and is seeking better access to the advanced US-made chips needed to power the emerging technology. 

Mubadala has also raised the proportion of its assets deployed in private equity investments and decreased the amount in public markets, reflecting a broader long-term trend. 

The investor said that 40 per cent of its assets were now in private equity, up from 38 per cent last year, while the proportion invested in public markets was now 23 per cent, down from 25 per cent in 2023. 

Mubadala has also increased its bets on infrastructure and private credit, and its private debt portfolio is now worth $20bn, the fund said. 

Sovereign funds in the oil-rich Gulf control 40 per cent of the world’s sovereign wealth, according to a Deloitte report published in March.

#SaudiArabia Goes Whistling Past the Kazakhstan Oil Graveyard - Bloomberg

Saudi Arabia Goes Whistling Past the Kazakhstan Oil Graveyard - Bloomberg

The four most dangerous words in finance are “this time is different.” History suggests that when Saudi Arabia launches a price war against one of its OPEC+ allies, it ultimately succeeds — but this time really will be different1.

Saudi efforts to bludgeon Kazakhstan into compliance with its OPEC+ oil production quota are doomed to fail. Ostensibly, Riyadh is trying to reestablish discipline among rogue producers; Kazakhstan and several others are cheating on their output targets. To force them to relent, the kingdom is voting at OPEC+ meetings to raise group production faster than previously expected, hoping that the ensuing price decline forces the troublemakers into line. In OPEC+ parlance, the Saudis are trying to give the Kazakhs a sweating.

To be sure, the kingdom isn’t only focused on Kazakhstan. Its oil policy is multidimensional: It appears to be trying to recoup market share, probably from US shale producers, and is simultaneously using cheap crude as a tool in diplomatic talks with US President Donald Trump.

In the market, the strategy of pumping more oil — two consecutive monthly increases of 411,000 barrels a day for the eight main OPEC+ nations — is working as one would expect, particularly at a time when demand growth is slowing. Brent crude earlier this week touched a four-year low of just above $60 a barrel. Brent is down 15% this year, and many observers anticipate further declines as Saudi production, currently just above 9 million barrels a day, heads higher.

Kazakhstan, though, isn’t cutting production to meet its OPEC+ quota. It has two strong motivations to keep pumping; it needs the revenue, and it’s in negotiations with international oil companies about investment plans that will determine the country’s economic development from now until the middle of the century.

First, the math. Thanks to the $48-billion expansion of its Tengiz mega-oilfield, Kazakhstan will pump on average 300,000 barrels a day more in 2025 than in 2024, with annual crude output averaging 1.8 million barrels a day this year. Those extra barrels can offset a large price decline. Put it simply, Kazakhstan isn’t sweating.

According to my back-of-the-envelope calculations, if Brent remains around its current level of $62 a barrel for the remainder of the year, Kazakhstan’s gross oil revenue would decline just 2% compared with last year; a drop to $60 would trim it by 4%. Even if Brent traded at $50 until December, the accompanying 12% decline in annual revenue isn’t enough to persuade the government in Astana to change course. Kazakhstan has already banked the proceeds of higher prices earlier this year: Brent crude averaged around $75 during the first quarter.

Much lower crude prices of, say, $40 through the end of this year may inflict enough of a hit to prompt Kazakhstan to reconsider its production policy — but that would put extraordinary pressure on the Saudi budget, too. So far, there’s little indication that the kingdom, which was taking on increased debt even before the recent decline in crude prices, is prepared to crash the market sufficiently to bring Kazakhstan to heel.

The second reason why Kazakhstan isn’t budging is its relationship with Big Oil. The nation has relied on Chevron Corp., Exxon Mobil Corp., Shell Plc, TotalEnergies SE and ENI SpA to build the three mega oilfields that are the backbone of its petroleum industry. The foreign companies have invested dozens of billions of dollars; if Astana forced them to pump less, they would probably balk at further investments. But Kazakhstan needs that spending to further expand production.

Beyond those Western oil companies, the rest of the Kazakh industry is dominated by state-owned KazMunayGas, along with Chinese, Russian and domestic privately owned groups. They mostly operate smaller fields that are significantly older. Cutting production there is complicated by vested local interests and the fact that output cuts may be impossible to reverse due to the age of the oilfields; they never recovered from shutdowns imposed during the Covid-19 pandemic, for example.

The pressure from Saudi Arabia comes at a delicate moment for Astana and the foreign oil companies operating there. The contracts that govern the three megaprojects will come up for renewal relatively soon — Tengiz is valid until 2033, Karachaganak until 2038 and Kashagan until 2041 — and both sides have started to explore extensions. Oil majors typically prefer to try to prolong agreements long before expiry, often as many as five years before the deadline is reached.

Tengiz is at the center of the current dispute between the Saudis and the Kazakhs. Forcing project leader Chevron and the other international oil companies involved to reduce production now would further complicate those extension talks.

So the most Kazakhstan is likely to do is to pay lip service to the OPEC+ targets. Expect more platitudes from Astana, reiterating in public its disposition to cooperate with the cartel while privately doing the opposite by pumping way more than its quota. For the Saudis, this time may truly turn out differently.

#UAE Investment Vehicle XRG Helps #AbuDhabi Win Trump's Favor - Bloomberg

UAE Investment Vehicle XRG Helps Abu Dhabi Win Trump's Favor - Bloomberg

Even by Abu Dhabi’s standards, the recent rush of investment bankers is unprecedented. Wall Street giants from Goldman Sachs Group Inc. to Morgan Stanley are courting the hottest new player in town: An $80 billion spinoff from the state oil company that wants to double in size over the coming decade.

As US President Donald Trump arrives in the emirate next week, this little-known firm is already being seen as a key player in the deepening relationship between Abu Dhabi and Washington. XRG, as the entity is known, is looking to splash out billions to build up its portfolio and the US is a key focus. That dovetails neatly with the American president’s call for foreign investment.

Even before Trump took office, Abu Dhabi had started to shape XRG as an investment vehicle focused on energy deals and few other firms will have its financial firepower worldwide, people familiar with the matter said. Many of its investments will be in the US, where the United Arab Emirates is investing across sectors as it seeks concessions from Trump.

Winning Trump’s favor is crucial for the UAE, of which Abu Dhabi is the capital. The Gulf country is racing to become a tech powerhouse and needs access to advanced Nvidia Corp. chips that were restricted under the Biden administration.

The UAE has pledged to plow $1.4 trillion into the US over the next decade, including through an entity called MGX that’s helping bankroll Trump’s $100 billion AI venture. Energy will be a key prong of the Gulf nation’s investment plans in the US and XRG has begun quietly working to build its internal M&A team, people familiar with the matter said.

“It’s pretty clear that with XRG the timing is stupendous. They were developing the company strategy before, but it’s putting Abu Dhabi in the right business to be on the right side of the administration,’’ said Jim Krane, the Wallace S. Wilson Fellow for Energy Studies at Houston’s Rice University. “For strategic purposes it has really helped.”

An XRG spokesperson said energy has been at the center of the growing UAE-US partnership for years and that growth is accelerating. The firm “is actively engaged with leading investment banks on high-quality opportunities—particularly in the US,” the spokesperson said.

XRG is the latest dealmaking behemoth in Abu Dhabi, which is already home to three sovereign wealth funds that control close to $1.7 trillion in assets.

Spun off from Abu Dhabi National Oil Co. to manage international dealmaking, the new firm is tasked with making acquisitions globally in areas from natural gas to low-carbon energy and chemicals.

Many of these acquisitions will be in the US, where the spinoff will make a big push to buy natural gas assets and invest in energy infrastructure — the kind of investment that appeals to Trump, who is trying to boost energy production at home as a way to limit prices. XRG is also looking into investment opportunities that support growth in AI and data infrastructure, other sectors that Trump is keen to build up.

Even so, there are potential challenges as the new firm will be a conglomeration of assets. Its strategy is still being fine-tuned internally, though there will be more clarity in the coming weeks to allow it to start deploying money, people familiar with the matter said.

Foreign investment deals are vital to Trump as US GDP slows. He’s been quick to cast them as political wins. And few nations are shelling out — or have the cash reserves to do so — more than the UAE.

Yet as entities like XRG invest in the US, the UAE has a string of additional policy goals.

After the country’s investment pledge, the US accelerated conversations about possibly easing restrictions on chip sales to Abu Dhabi although nothing has been decided, Bloomberg News reported this month. This week, Bloomberg reported that Trump is considering rescinding global semiconductor curbs and Washington could engage in direct negotiations with countries like the UAE.

The UAE is also likely to seek some exceptions on the 25% tariffs placed on aluminum exports to the US, according to some of the people. It also wants faster approvals for its US acquisitions, the people said. The White House National Security Council didn't respond to a request for comment.

As the Gulf country ramps up US investments, few people will be more consequential than Sultan Al Jaber, the CEO of Adnoc. An executive with long experience navigating the halls of power, he wears many hats, acting also as XRG’s executive chairman and the UAE minister for advanced technology.

He joined national security advisor Sheikh Tahnoon bin Zayed Al Nahyan on the recent trip to Washington where the $1.4 trillion investment pledge was announced.

While in the US, Al Jaber spoke at a prominent Houston conference, where he handed out rubber bracelets with the XRG logo and ended his speech with the slogan “Make Energy Great Again” — a seeming nod to Trump’s MAGA movement.

“Over the next few months and foreseeable future, you will be witnessing very serious, large, significant investments by XRG in the energy business here in the US,” he said at the time.

Al Jaber has a track record of getting things done. As head of the UN’s 2023 climate change conference in Dubai, he combined his skills of diplomacy with an ability to speak forcefully and drive dissenters into agreement.

These days, he displays great excitement about XRG, quickly pointing out that the name is derived from the word “exergy,” which is the maximum impact created by a unit of energy.

Investment banks, meanwhile, see a new source of fees in XRG as it sets off on its deal spree. The new entity is particularly vital to Wall Street as acquisitions stall globally due to market turmoil.

So crucial are XRG’s global plans to Abu Dhabi that international heavyweights have been placed atop its board. Key names include former BP Plc CEO Bernard Looney and Blackstone Inc. President Jon Gray.

Adnoc is considering hiring a high profile outsider with investment experience as CEO of the unit, people familiar with the matter said. As its executive chairman, Al Jaber is also seen wielding significant influence, the people said. “Adnoc and XRG are separate entities,’’ the spokesperson said, adding XRG functions with full autonomy and has its own leadership team for an agile approach.

Emirati officials emphasize that US energy investments, like XRG’s, are core to their own country’s economic growth and to diversify from crude. The UAE has been running budget surpluses in a sharp contrast with Saudi Arabia, where Goldman Sachs has projected the budget deficit could touch $67 billion this year. That makes Abu Dhabi vital to the US president’s economic agenda.

Adnoc’s already busy in the US, buying natural gas and other assets that will be folded into XRG. Covestro AG, the German chemicals maker Adnoc, bought for $13 billion last year will also be part of the new spinoff.

Still, transactions proposed to XRG are likely to face strong internal scrutiny on price and valuation, people familiar with the matter said, notwithstanding the imperative to court Trump with US investments.

Ultimately, Abu Dhabi wants “to be seen as serious players, not as the ones that are willing to pay any price for an asset,” said Rachel Ziemba, adjunct senior fellow at the Center for a New American Security.

#AbuDhabi’s Mubadala Builds $20 Billion Private Credit Portfolio - Bloomberg

Abu Dhabi’s Mubadala Builds $20 Billion Private Credit Portfolio - Bloomberg

Mubadala Investment Co. deployed 119 billion dirhams ($32 billion) last year, as the world’s most active sovereign wealth fund deepened its push into sectors such as private credit and artificial intelligence.

The Abu Dhabi-based investor’s assets under management grew to 1.2 trillion dirhams, up 9.1% from the previous year, according to a statement. It reported a five-year rate of return of 10.1%, roughly in line with last year’s figure.

The wealth fund’s private credit portfolio rose to 73.5 billion dirhams, supported by partnerships with Apollo Global Management Inc., Carlyle Group Inc. and KKR & Co., among others.

Private credit has been the fund’s top-performing asset class for three years in a row, its deputy chief executive said in January. It has continued to expand in the space this year, including a $1 billion commitment to private credit and other strategies managed by Fortress Investment Group.

Mubadala Capital, the fund’s asset management arm, now oversees 110.2 billion dirhams. The unit grew in size following its acquisition of Fortress and a 3.6 billion dirham partnership with Silver Rock Financial.

Artificial intelligence was another key focus. Alongside G42, Mubadala was a founding partner of MGX, a technology investment firm launched in March 2024 with the ambition of eventually managing over $100 billion in assets.

In September, MGX joined BlackRock Inc. and Microsoft Corp. in a $30 billion initiative to build data centers and energy infrastructure. Then in January, it backed the $100 billion Stargate venture — alongside OpenAI, SoftBank Group Corp. and Oracle Corp. — to fund AI infrastructure in the US.

Mubadala is one of three main wealth funds in the oil-rich emirate, which together manage $1.7 trillion in assets.

Emirates Group Reports Record Profit on Strong Travel Demand - Bloomberg

Emirates Group Reports Record Profit on Strong Travel Demand - Bloomberg

Emirates Group, operator of the world’s largest long-haul airline, reported a third straight year of record profit and said it continued to benefit from strong global travel demand.

Profit rose to 20.5 billion dirhams ($5.6 billion) for the period ended March 31, after accounting for a corporate income tax enacted in 2023, the Dubai-based company said Thursday in a statement. In the prior year, the company reported profit of 18.7 billion dirhams. Revenue rose 6% to 145.4 billion dirhams.

The state-owned carrier has benefited from huge passenger flows through its hub in Dubai, after travel demand roared back from the Covid-19 pandemic. Geopolitical tensions and tariffs haven’t affected operations.

“While some markets are jittery about trade and travel restrictions, volatility is not new in our industry,” Chairman and Chief Executive Officer Sheikh Ahmed bin Saeed Al Maktoum said. “We simply adapt and navigate around these challenges.”

The airline has previously said it sees positive numbers for the next two years, with no impact from President Donald Trump’s tariffs so far.

In light of its performance, Emirates will pay out 22-week bonuses to staff, according to an internal memo seen by Bloomberg and confirmed by the airline. That’s higher than the 20-week package it handed employees last year.

The carrier will also pay its owner, the Investment Corporation of Dubai, a dividend of 6 billion dirhams.

To accommodate its growth plans, Emirates is looking to expand its fleet of widebody jets by adding additional Airbus SE 350 and Boeing Co. 777X aircraft. Both models come with challenges. Engines made by Rolls Royce Holdings Plc have hampered performance on the Airbus 350-1000 aircraft, and the Boeing model — of which Emirates has already ordered over 200 units — is years behind schedule.

Gulf bourses end mixed on earnings, focus on US-China talks | Reuters

Gulf bourses end mixed on earnings, focus on US-China talks | Reuters

Stock markets in the Gulf ended mixed on Thursday on corporate earnings announcements, while investors awaited the outcome of U.S.-China trade talks this weekend.

U.S. President Donald Trump on Wednesday suggested China initiated the trade talks, adding he was not willing to cut U.S. tariffs on Chinese goods to get Beijing to negotiations. Treasury Secretary Scott Bessent said the upcoming talks were a start, not 'advanced' discussions.

Saudi Arabia's benchmark index (.TASI), opens new tab dropped 0.3%, hit by a 1.4% fall in Saudi Arabian Mining Company (1211.SE), opens new tab and a 2.7% decrease in Etihad Etisalat Company (7020.SE), opens new tab.

Elsewhere, Middle East Healthcare Company (4009.SE), opens new tab plunged about 9% - its biggest intraday fall in over a month - despite reporting a sharp rise in quarterly profit.

Dubai's main share index (.DFMGI), opens new tab dropped 0.4%, with blue-chip developer Emaar Properties (EMAR.DU), opens new tab retreating 1.1%.

Meanwhile, the U.S. Federal Reserve held interest rates steady on Wednesday but said risks of higher inflation and unemployment had risen, as its policymakers grapple with the impact of Trump's tariffs.

The Fed's decisions impact monetary policy in the Gulf, where most currencies, including dirhams, are pegged to the U.S. dollar.

The United Arab Emirates Central Bank has maintained its base rate at 4.40%, keeping monetary policy steady.

In Abu Dhabi, the index (.FTFADGI), opens new tab added 0.2%, supported by a 1.9% rise in ADNOC Drilling Company (ADNOCDRILL.AD), opens new tab, a day after reporting a 25% jump in first-quarter profit.

Oil prices - a catalyst for the Gulf's financial markets - rose over 1%, buoyed by hopes of a breakthrough in looming trade talks between the United States and China, the world's two largest oil consumers.

The Qatari index (.QSI), opens new tab finished 0.4% higher, with the Gulf's biggest lender Qatar National Bank (QNBK.QA), opens new tab gaining 0.4%.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab eased 0.2%.
Egypt's headline inflation is expected to have edged up in April, boosted in part by an increase in fuel prices early in the month, a Reuters poll found.