Abu Dhabi to combine sovereign funds creating $250bn behemoth

Together Mubadala and Abu Dhabi Investment Council will be the world’s 11th largest sovereign fund



The UAE emirate of Abu Dhabi is to combine two of its largest sovereign funds to create a behemoth with estimated assets of nearly $250bn.

UAE President and Abu Dhabi Ruler Sheikh Khalifa bin Zayed Al Nahyan issued a law on Wednesday restructuring Abu Dhabi Investment Council (ADIC) and making it part of Mubadala Investment Group.

The two funds are Abu Dhabi’s third and second largest respectively, according to the Sovereign Wealth Fund Institute, with Mubadala’s $125bn of assets slightly ahead of Abu Dhabi Investment Council’s $123bn.

Mubadala itself said its assets grew from Dhs449.7bn to Dhs465.5bn ($126.7bn) in the first half of 2017.

Read: Abu Dhabi state fund Mubadala swings to H1 profit

By combining they would rank the 11th largest sovereign fund in the world with roughly $248-250bn of assets, ahead of Saudi Arabia’s $223.9bn Public Investment Fund, according to the organisation’s rankings.

Read: Saudi’s Public Investment Fund climbs sovereign rankings after active 2017

The plans will be seen as further streamlining of the management of Abu Dhabi’s sovereign assets after the high-profile merger of Abu Dhabi sovereign funds Mubadala Development Company and International Petroleum Investment Company to create Mubadala Investment Group in May last year.

Read: With $125bn in assets, Mubadala Investment Company begins operations

Abu Dhabi royal family members said the merger was intended to support the oil-rich emirate’s diversification efforts.

“ADIC becoming part of the Mubadala Group is yet another step in Abu Dhabi’s efforts to accelerate the diversification of the UAE’s economy. With an investment vehicle of significant scale, world-class talent and wide geographical reach, we enhance the country’s competitive position,” said Abu Dhabi Crown Prince and Deputy Supreme Commander of the Armed Forces Sheikh Mohamed bin Zayed Al Nahyan.

UAE Deputy Prime Minister, Minister of Presidential Affairs and vice chairman of Mubadala, Sheikh Mansour bin Zayed Al Nahyan, said the merger came under the emirate’s plans to “create world-class investment vehicles of scale”.

The new law makes Mubadala Investment Company’s board of directors the board of directors of Abu Dhabi Investment Council.

The senior leadership of ADIC will remain in place with its CEO reporting to Mubadala group CEO and managing director Khalifa al Mubarak.

The combination will leave Abu Dhabi with two major investment funds, the combined Mubadala and the Abu Dhabi Investment Authority.

The latter is estimated to be the world’s third largest sovereign fund with $828bn of assets, according to Sovereign Wealth Fund Institute.