Abu Dhabi Corrals its State Funds to Form Alternative Investment Management Businesses
Posted on 03/06/2023
The United Arab Emirates is using its mega sovereign wealth funds, government funds, and family enterprises to build and create large alternative investment businesses. Mubadala Investment Company, through Mubadala Capital, has its hands in a number of investments. Mubadala Capital is keen on managing third-party capital and has formed funds to do so. Investcorp (Investcorp Holdings BSC) is even under the guidance of Mubadala.
ADQ and IHC
Abu Dhabi Developmental Holding Company PJSC (ADQ) is a sovereign wealth fund keen on building businesses. ADQ and International Holding Company (IHC) seek to form a multi-asset class investment manager. The parties are looping in global private equity firm General Atlantic as a strategic partner and investor. The investment manager will manage a portfolio of assets from ADQ’s alternative investments platform Abu Dhabi Growth Fund (ADG) and IHC, the three parties said, as well as fresh capital from founding shareholders and future investors. This third-party capital could come from other institutional investors, pension funds, family offices, and other private and public firms. The fund manager will have its primary operations out of Abu Dhabi. The fund manager will have intentions to add further international offices in North America, Europe, and Asia. The funds will invest across the capital structure and asset life cycle, covering early-stage venture capital to growth and scale-up equity, through to mature and established businesses. It will invest through a combination of LP commitments to global funds (i.e., fund of funds strategy), direct investments (including private equity and venture capital), credit investments, and co-investments.
William E. Ford, Chairman and CEO of General Atlantic, said in the press release that “General Atlantic has been investing in the Middle East since 2015 and we are committed to further deepening our engagement in the region. We are proud to join as an anchor investor and strategic partner to support ADQ and IHC in establishing a leading global alternative investment and wealth manager from the region. This new investment manager will play an important role in strengthening Abu Dhabi’s position as an emerging global financial center.”
Abu Dhabi-based Royal Group owns a majority interest in IHC. ADQ and IHC are chaired by Sheikh Tahnoon bin Zayed al-Nahyan. IHC was formed in 2008 as part of the UAE’s initiative to diversify and grow non-oil businesses in the nation.
On another note, Abu Dhabi artificial intelligence firm G42 seeks to float Presight.ai through a 1.82 billion dirham initial public offering and list its shares on the local stock exchange. Presight.ai is a data analytics unit of G42. IHC and ADQ have entered as cornerstone investors in Presight.ai. Sheikh Tahnoon bin Zayed al-Nahyan is the Chairman of G42.