Asset AllocationMay 7, 2021

Mubadala Goes on a Spending Spree in 2020

The sovereign wealth fund invested $29 billion into growth sectors, including in technology, life sciences, and consumer goods.

Reported by Sarah Min

Sovereign wealth fund Mubadala Investment Company deployed $29 billion (AED 108 billion) in 2020. The Abu Dhabi-based allocator doubled down on investments into technology, life sciences, consumer goods, and other growth sectors during the pandemic-marred year.

The state-owned investor said it “decided to accelerate the pace of our capital deployment” from the prior year, when Mubadala invested just $18.5 billion. The fund has been diversifying its portfolio, investing both domestically and internationally to wean Abu Dhabi’s economy off its dependence on energy.

“In line with our long-term strategy, we increased our investments in sectors where we have high conviction, and with high performing fund managers,” Mubadala Managing Director and Group CEO Khaldoon Al Mubarak said in a statement.

“Technology and life sciences in particular have been essential to the world over the last year, and we see those sectors bringing greater opportunity for deeper investment,” he added.

This strategy, and a surge in its public equities portfolio, helped the state-owned investment group end 2020 with record profit and growth, the fund said Thursday. By December, Mubadala boasted US$243.4 billion (AED 894 billion) in assets under management (AUM), a 4.8% jump from the prior year, when it had US$232 billion (AED 853 billion).

That trailed the US benchmark S&P 500’s total return, which jumped 18.2% last year. Meanwhile, the tech-heavy Nasdaq soared roughly 40% last year.

Over the past five years, Mubadala’s portfolio has returned 9.8% yearly. “This strong performance was a reflection of our agility as an investor,” Mubadala Group Chief Financial Officer Carlos Obeid said in a statement.

Total comprehensive income has also increased for Mubadala. Last year, the sovereign wealth fund earned $19.6 billion, versus $14.4 billion in 2019. The fund said that is the largest amount in Mubadala’s history.

Among the direct investments and partnerships Mubadala made last year as part of its spending spree are a $1.2 billion investment into Indian telecom company Jio, a $740 million commitment into tech investor Silver Lake, a $600 million investment in pharmaceutical supplier PCI Pharma, and led a $2.25 billion funding round into Alphabet’s Waymo, the tech giant’s autonomous car subsidiary.

The fund expects it will continue to maintain a strong cash position. At the moment, roughly one-third (34%) of the portfolio has direct and indirect investments into private equity, 29% in public markets, and 14% in real estate and infrastructure.