Mubadala to stick with patient investment strategy

Investors must remain wary of expected inflation and spiking interest rates, group chief executive of Abu Dhabi state investment fund said on Monday, while indicating that he expects no change Mubadala’s investment strategy and themes in 2022.

Stressing that patient investment strategies would weather difficult cyclical phases, Khaldoon Al Mubarak, managing director and group CEO at Mubadala Investment Company, said areas such as renewables, technology and life sciences will continue to remain themes for the state investor.

“Thematically there is no shift in terms of our strategy,” Al Mubarak said. “From a short-term perspective, yes there are challenges ahead. I think inflation is creeping in many places,” he said in his address at the fourth edition of the Global Manufacturing and Industrialisation Summit.

He said with the world coming out of the Covid-19 pandemic there is strong liquidity globally, though potential increases to interest rates would have implications.

Speaking during the ‘Investing in the Leading Edge of Innovation’ session at GMIS2021, Al Mubarak elaborated on the investment themes of technology, life sciences and the energy transition. “From a short-term perspective, there are challenges ahead with inflation creeping in and anticipated interest rate hikes, which will undoubtedly have implications.”

He said the approach of Mubadala, which manages $243 billion in assets, is that of the long-term, patient investor with convictions and thematic views. “This has helped us to weather through difficult cyclical periods that would have challenged others,” Al Mubarak said, citing Mubadala’s investment in Masdar in 2006 and GlobalFoundries in 2009 as an example.

He said Abu Dhabi Future Energy Company (Masdar) is now a global renewables player, with investments and assets across 33 countries, representing investments of over $20 billion and nearly 11 gigawatts of renewable power generation.

“Fifteen years ago, we had started investing in the renewable energy transition, before it became the popular subject it is today. We are now well-positioned in that sector, empowered with the ability to continue growing at scale,” Al Mubarak said.

At the recent virtual summit between US President Joe Biden and Chinese President Xi Jinping, Mubadala’s CEO said: “The world wants and needs continued economic prosperity, and maintaining these open lines are in the best interest of stability.”

“As a global trade and economic hub, the UAE has acted as the transiting point between the East and the West with substantial trade ties on both sides. Global stability is crucial, and only enhances our proposition in terms of trade, business and economic growth,” said Al Mubarak.

On Mubadala’s strategic partnership with the semiconductor manufacturer GlobalFoundries, Al Mubarak said that Mubadala had invested in what was a “challenging and competitive” sector, but is now critical to global supply chains and every major future industry.

The GMIS2021 Summit is part of the six-day GMIS Week which will feature over 250 global speakers, including heads of state, prime ministers, ministers and CEOs of some of the largest organisations from November 22-27.