Skip to content Skip to Search
Skip navigation

Mubadala and Alpha Dhabi to capitalise on discounted assets

Mubadala
The green bond offers a yield of 6.03 percent and coupon at 5.875 percent
  • Partnership will collectively deploy $2.5bn over next 5 years
  • Expert says move is to invest more in credit opportunities
  • Almost half of 2022 global mega-deals were made by Gulf SWFs

The move by Alpha Dhabi and Mubadala to join forces and co-invest in credit opportunities does not pose a significant threat to traditional banking structures.

Instead, according to Rachel Ziemba, founder of geo-economic advisory firm Ziemba Insights, it will act as a valuable tool to “look for early-stage investments and perhaps pick up assets at a discount, at a time when others in this space are pulling back”.

Alpha Dhabi, the fourth most valuable listed company in Abu Dhabi, and Mubadala plan to collectively deploy up to AED9 billion ($2.5 billion) over the next five years.

The aim is to leverage Mubadala’s long-term partnership with Apollo, one of the world’s largest alternative asset managers, to access high-quality private credit investment opportunities.

With rising interest rates and inflationary pressures, as much of the world prepares to slip into recession, the move could be seen as the UAE seeking to position itself as an alternative source of funding to traditional banks.

However, Ziemba told AGBI that while it was an “interesting development”, it was one that “is well in line with an established trend of regional strategic funds looking to invest more in credit opportunities at home and abroad and in leveraging knowledge from their investments abroad in key sectors of development at home.”

“Ultimately, it may be important within some key sectors especially at early-stage investment, but the volumes being considered aren’t enough to move the needle at a global capital flows perspective,” she added.

Allocations to the private credit asset class have continued to gain traction and increase regionally. They are seen as a route to generate strong returns while providing effective downside protection, particularly in the current macro-economic environment.

Ziemba added that she expects Mubadala and others to continue investing in banks and traditional finance “while also providing new vehicles to increase flows at home to earlier stage and later stage businesses”.

Mubadala will hold 80 percent ownership in the Abu Dhabi Global Market-based joint venture entity, with the remaining 20 percent to be held by Alpha Dhabi.

Hani Barhoush, CEO of disruptive investments at Mubadala, said: “We are excited to form this partnership with Alpha Dhabi at a time when global private credit markets are entering a period of significant growth.”

Sovereign wealth funds (SWFs) across the Middle East are forecast to take advantage of limited competition from global peers this year to pursue “cheap” assets in Europe, the US and other western markets, according to the annual study of the sector by consultancy Global SWF.

Middle Eastern SWFs more than doubled their investments in Western economies, including the US and Europe, from $21.8 billion in 2021 to $51.6 billion in 2022.

Of the 60 mega-deals in 2022 (those of $1 billion or more), 26 were carried out by Middle Eastern SWFs, and 17 of them were linked to American or European assets.

Latest articles

Jacksonville Port in Florida. A new container service connecting the port to Jeddha could improve Saudi exports

Florida port service could increase Saudi non-oil exports

Saudi Arabia’s exports are set to improve following the introduction of a new container service that will link Jeddah with Florida. Non-oil exports rose 4.4 percent year on year in February while production cuts led oil exports to slip to 77 percent of the total, the government said. Jacksonville Port Authority (Jaxport) in Florida said […]

An Emirates Boeing 777-300R. The Morocco facility will convert passenger planes to cargo

Boeing plane conversion facility to be built in Casablanca

A production facility is to be set up in Morocco to convert Boeing 777-300ER passenger jets into freighters. Stratos Industries will build three wide-body aircraft hangars at the Mohammed V International Airport in Casablanca as part of a deal between US-based companies Kansas Modification Center (KMC) and Integrated Aerospace Alliance (IAA). KMC will convert up […]

Art NFTs Video length: 04:13

Dubai art dealer uses NFTs for fractional art ownership

A Dubai tech startup is introducing tokenisation to the art world, after the NFT bubble burst spectacularly. 10101.art aims to make investing in art accessible to all by selling digitised fragments of works by artists including Andy Warhol, Banksy and Picasso, allowing for collective ownership of a masterpiece for as little as $100 a fragment. […]

Rain falling on paved surfaces such as roads has nowhere to go, but retrofitting roads to allow rainwater harvesting could help, some experts say

Rain harvesting could help Dubai offset a stormy future

If last week’s floods made improving drainage a necessity for Dubai, the reward might come in the form of more natural water resources, provided the emirate can boost rain harvesting efforts, industry observers tell AGBI. “The main idea for countries, especially in drier areas, is to try to reuse water as much as possible,” says […]