Mubadala Investment Company, a sovereign wealth fund owned by the Government of Abu Dhabi, announced its financial and operational highlights for the first half of 2018. With a globally diversified portfolio, Mubadala has established a unique value-creation and risk-management strategy.
This article will provide an overview of this strategy and the performance of its various investment portfolios in the first half of 2018.
Overview of Mubadala Investment Company
Mubadala Investment Company is a sovereign wealth enterprise owned and administered by the Government of Abu Dhabi. With assets under management of over US$209 billion, they are one of the world’s largest investor companies. They have office, industrial, hotel and leisure operations located across key markets in Europe, the Americas, the Middle East and Asia.
Mubadala’s strategy focuses on driving returns from their investments and developing capabilities to create a diversified portfolio to deliver sustainable value across industrial sectors. To achieve this, Mubadala pursues five core objectives:
- Maintaining financial sustainability
- Allowing for diversified growth opportunities
- Enabling responsible stewardship
- Promoting sustainability & impact
- Focusing on active ownership
Their focus portfolio comprises seven main businesses: Aerospace; ICT & Digital Platforms; Renewable Energy & Clean Technology; Oil & Gas Services & Technologies; Real Estate & Hospitality; Automotive Technologies; and Healthcare Technologies. Through these businesses they invest in projects that help drive economic growth through partnerships with governments’ development organisations or public-sector entities and private investors who share the same development goal or vision with Mubadala Investment Company to build bridges between industries across international commercial markets.
Mubadala Investment Company Announces Half-Year 2018 Financial and Operational Highlights
Mubadala Investment Company has recently announced their half-year 2018 financial and operational highlights. The company has clarified that their strategy revolves around rigorous capital stewardship, sustainable diversification and balanced investments to generate long-term value. This strategy is underpinned by their core businesses spanning the world’s leading technology clusters and services sectors.
In this article, we will be discussing the key aspects of Mubadala’s strategy and portfolio.
Mubadala’s vision and mission
Mubadala Investment Company (Mubadala) is a global investment company with a mandate to generate sustainable financial returns to the Government of Abu Dhabi by building and investing in global and local businesses.
The Company’s vision is to be an innovative and insights-driven global leader in sustainable investments that enhances life in Abu Dhabi, unlocks long-term value for stakeholders, and creates economic diversification into new industries. Its mission is to build sustainable businesses that positively impact society, its people and its environment.
The strategy of Mubadala leverages opportunities in their core businesses — aerospace, ICT, semiconductors, renewables — while also considering potential investments outside these industries. It also prioritises asset- light partnership models made possible by advanced technology capabilities. Mubadala also looks at how new industries such as artificial intelligence, blockchain-based solutions, 3D printing and other cutting edge technologies can be deployed across the existing portfolio to enhance existing capabilities. In short, it seeks to balance short term risk vs reward with long term sustainability goals when developing its strategy.
Mubadala’s investment strategy
Mubadala Investment Company (Mubadala) is a global investment company focusing on creating lasting value and positive impact. Its portfolio spans multiple industries and geographies, supported by a wide range of specialist teams with deep market knowledge and technical expertise.
Mubadala’s investment strategy is tailored to its mission of complementing Abu Dhabi’s 2030 Vision: enabling progress through sustainable economic diversification and enhancing opportunities for future generations while delivering attractive financial returns.
The company therefore seeks to achieve its broad objective by focusing on three objectives:
- Investing in innovative businesses that aim, where possible, to create long-term social and environmental benefits;
- Unlocking potential by investing early in sectors, companies and countries;
- Partnering behind ideas that promote the rationale for investing – in order to achieve scale and accelerate development.
In doing so, Mubadala’s investments are typically made across four asset classes: direct investments in private companies, public equity markets, fixed income, money market instruments such as bonds, and real estate within the wider markets of Mubadala-supported platforms such as technology parks, real estate or infrastructure services. In addition to these investments directly deployed by Mubadala’s Investment Solution Teams (IST), it will also invest through its cooperation with corporations globally who invest into new technologies which meet established criteria for active support from the company.
Mubadala Investment Company, one of the world’s leading sovereign investors and a prominent force in global finance, recently announced their financial and operational highlights for the first half of 2018. Their diversified portfolio and globally-focused strategy has allowed them to remain a strong leader in the global economy.
Let’s take a closer look at their portfolio and overall strategy.
Overview of Mubadala’s portfolio
Mubadala Investment Company is a diversified international investment company based in the United Arab Emirates. Its portfolio is built upon five core pillars:
- Technology and industry
- Infrastructure, energy and resources
- Capital, financial services and health care
- Real estate and hospitality
- Aerospace, defence and security
Mubadala’s focus since inception has been on strategic investments that offer attractive returns that can be consolidated, amplified or reinvested to achieve long-term sustainable growth for the region.
Consequently, Mubadala has played a pivotal role in realising Abu Dhabi’s vision of creating an economically sustainable, diversified economy which attracts foreign direct investment (FDI) while providing local employment opportunities. With more than $240 billion of total assets — most of which are publicly traded — this strategy continues to create significant value in tandem with the Emirate’s goals.
Mubadala has established a presence in more than 30 countries across six continents and owns stakes in some of the world’s most respected companies including numerous Fortune 500 ones. Since 2017, it has emphasised improving strong fundamentals and investing across intersectional technology platforms.
Mubadala also works with governments worldwide to develop large-scale projects that stimulate economic growth by investing alongside key government entities such as Abu Dhabi Development Holding Company (ADHDH) or through Dubai Healthcare City (DHCC). Apart from this direct private sector involvement, Mubadala also provides additional direct funding for economic development programs geared towards poverty reduction, infrastructure development and education reform throughout the region as part of its long-term vision for sustainable outcomes for generations to come.
Mubadala’s portfolio performance
Mubadala Investment Company ensures that its portfolio companies have access to the best practices, expertise and resources available. To maximise return on investment, Mubadala adopts a strategy of proven value creation that encompasses three main approaches:
1) Corporate finance strategies: supporting optimised capital structures, diversifying investments and mitigating financial risks.
2) Organic growth strategies: aligning and deepening the knowledge base through new capabilities and innovation to increase enterprise value.
3) Strategic capital investments: deploying capital appropriately to increase shareholder returns.
Mubadala’s portfolio performance is measured in terms of total returns, focusing on risk-adjusted performance measures. To measure performance reliably over time and across different investment cycles, Mubadala actively evaluates its portfolio companies’ financial performance relative to their peers or sector benchmarks both at the time of acquisition and over some time after acquisition. The evaluation accounts for qualitative factors such as business models and quantitative metrics such as financial disciplines including earnings per share (EPS), return on invested capital (ROIC) metrics among others. Additionally, Mubadala relies on market data to set benchmarks for strategic instruments for measuring historical returns and benchmark peer performances where applicable.
Financial and Operational Highlights
Mubadala Investment Company, a leading Abu Dhabi-based investment and development firm, announced its financial and operational highlights for the first half of 2018.
The report reflects Mubadala’s strong financial performance, continued growth across its diverse portfolio, and the success of its strategic investments. By the end of the second quarter, the company had allocated over US$ 42 billion in investments through its various businesses and activities.
Overview of Mubadala’s financial and operational highlights
Mubadala is a strategic investment company with a significant global presence that works to create partnerships and long-term value for the Emirate of Abu Dhabi. Mubadala’s financially-disciplined approach requires strong financial performance. As such, a review of Mubadala’s financial and operational highlights provides an indication of its ability to deliver the desired outcomes.
Mubadala’s key operational highlights demonstrate its sound strategy and consistent performance:
- Total assets under management (AUM) grew by 4% YoY to reach AED 215 billion at the end of 2020
- Total income recorded AED 22 billion in 2020, which is an increase of 6% compared to 2019
- Realised returns increased in 2020 compared to 2019 by 3%, demonstrating improved capital efficiency and strategy
- Total dividend payments reached AED 14 billion in 2020, representing a 37% year on year increase driven by growth in net income
- Employee headcount stood at 10,180 at the end of 2020, up 5.2% from 2019
In addition, Mubadala has made significant investments across sectors including renewable energy, advanced manufacturing & technology, healthcare & life sciences, sports & leisure and infrastructure projects. This confirms that the firm is moving ahead with strategies following strong fundamentals to contribute towards further socio-economic development for Abu Dhabi and beyond.
Mubadala’s half-year 2018 financial and operational highlights
Today, Mubadala Investment Company (Mubadala), one of the world’s leading financial and investment groups, reported a strong performance for the first half of 2018.
The Abu Dhabi- based company recorded total investments into its portfolio of AED40.7 billion, up from AED25.9 billion during the same period in 2017 and AED42.9 billion by year-end 2017. During the same reporting period, Mubadala also recorded total gains on investments at AED2.5 billion compared with a loss of AED10.3 billion in 2017, primarily driven by its technology-related investments and strong performance within its global portfolio of international companies and KSA’s local markets.
The wholly owned government-owned asset manager achieved good returns across its strategic focus industries – aerospace and technology; petrochemicals; metals, minerals and mining; energy; utilities; healthcare; real estate & infrastructure; services & financial investments – delivering healthy levels of earnings from those businesses to account for 38 percent of total returns for the period ending June 30th 2018, with Energy being one bright spot with over 40% return rate during the same period.
In addition to its significant portfolio gains, Mubadala also drove growth through good outcomes for IPOs carried out on UAE markets generating big returns through exits achieved on semiconductor maker GlobalFoundries which was sold to an Abu Dhabi government-run fund after Mubadala had increased their cost basis tenfold over eight years through savvy management decisions while actively reducing risk by maintaining a diversified holdings. Furthermore, Mubadala’s continued commitment to invest in new technologies including R&D initiatives within and outside Abu Dhabi, have resulted in $13bn worth investment commitments within various ecosystems into venture capital funds in India & China among elsewhere. In addition, the success of these endeavours has resulted in a large influx of foreign direct investors into Abe Dhabi looking to strike partnerships or invest alongside Mubadala.
By investing more money into new opportunities such as Uber’s recent $3bn investment round dedicated solely to clean energy technology has established Abu Dhabi as an international leader in disruptive technologies which has attracted significant attention from governments around who are looking for viable modals for a meaningful economic diversification strategy towards sustainable growth models.