The Right Mix

How is Mubadala responding to the pressures of the current macroeconomic situation?

Any prudent, active global investor should be managing its portfolio through challenging economic conditions. For Mubadala, this has meant optimizing expenditures, both operational and capital, monetizing assets when value creation opportunities exist, and ensuring that we maintain a diverse portfolio in order to maintain stability through volatility. We continue to meticulously evaluate our portfolio to ensure we are applying the right mix of long-term strategic vision with the ability to adapt when opportunities arise. If we see the right conditions materialize we have and will continue to consider the merits of monetization. We believe that the current global economic environment underpins the importance of our shareholder’s vision to diversify Abu Dhabi’s economy, and the role Mubadala plays in delivering on that vision. For patient investors, this offers opportunities and we will continue making targeted investments that advance Abu Dhabi’s priorities.

What role does Mubadala, as a state-owned investment fund, play within the national economy at a time when the deficit has widened?

First of all, it is important to understand that Mubadala’s mandate to support Abu Dhabi’s economic diversification has not changed since we were set up by the Abu Dhabi government over 14 years ago. In fact, our particular focus is even more intense during cycles like these, in terms of delivering and transforming the economy in line with strategic priorities. Against this backdrop, 2015 was another strong year of delivery, with Mubadala contributing to a range of milestone developments in the UAE, including the opening of Cleveland Clinic Abu Dhabi, the region’s most sophisticated hospital. This complex care facility is the only one of its kind in the region and reduces the need for thousands of UAE patients to travel abroad for treatment. In 2015, the hospital completed more than 58,000 appointments and 2,300 surgeries for patients, many of whom would have otherwise required overseas treatment. Another success story for us has been Strata, our composite aero structures manufacturer, which saw Boeing deliver the first 787 Dreamliner to Etihad Airways with UAE-made components. Strata is also part of an industrial cluster that is creating tens of thousands of local jobs and providing opportunities for the UAE’s residents and businesses alike

Which markets are currently appealing to Mubadala, bearing in mind mixed sentiment around BRICS, and low oil prices hammering GCC economies?

As a global investor with a long-term perspective, Mubadala is constantly assessing multiple markets. In 2015, for example, we established a $10 billion UAE-China Joint Investment Fund with China Development Bank Capital and China’s State Administration of Foreign Exchange. The fund will have the flexibility to look at a range of alternative investment strategies, asset classes, and special opportunities, including greenfield investment projects with the aim of building a balanced portfolio with a focus on sustainable returns and principal capital protection. The strategic and commercial partnership builds on investments we have made through Mubadala Capital, our dedicated, in-house asset and investment management unit. With a focus on sovereign investments, including those with Russia and France, we gain direct access to key international markets alongside trusted local partners, who bring local expertise and investment access to the table. Brazil is another market where Mubadala has interests. In 2015, we finalized the restructuring of our $2 billion preferred equity investment in the EBX Group. The completion of this complex restructuring has enabled us to gain a portfolio of assets that hold attractive, long-term value in sectors aligned with, and complementary to, core Mubadala businesses, such as metals and mining, infrastructure, and real estate. The aggregate value of these assets is now in excess of the original amount invested, and we have opened an office in Rio de Janeiro to manage the Brazil investment portfolio.