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Abu Dhabi, UAEMonday 17 December 2018

Mubadala's new venture capital arm is a feather in its cap

Savvy investments in technology are putting Mubadala in a league of its own

Mubadala Investment Company, Abu Dhabi's strategic firm with US$127 billion in assets, has always been a savvy investor. Once again it has proved that it has its finger on the pulse. The tech pulse, that is.

This May, Mubadala announced a $15bn commitment to the $100bn Softbank Vision fund, the high-profile tech investment brainchild of Japan’s Softbank Group, which has already secured investment commitments from other high profile names including Saudi Arabia's Public Investment Fund (PIF), Apple, Qualcomm and Taiwan’s Foxconn.

On Wednesday, Mubadala took its tech-investment strategy a step further, with the announcement of a venture capital arm based in San Francisco.

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In addition to overseeing and managing Mubadala's commitment to Softbank's Vision fund, a dedicated ventures investment team will also oversee the Mubadala Ventures Fund, a $400 milion collaboration with Softbank, and a $200mn fund of funds.

The new venture capital arm will fall under Mubadala Capital, the financial investment arm of the company that manages more than $10bn in assets across its portfolio.

Mubadala is already a seasoned global investor, with stakes in companies such as private equity firm the Carlyle Group, British energy major BP and EMI Music publishing. Its further push into the venture capital world is the latest extension of its technology strategy, one that is shared by many regional peers.

Saudi Arabia's PIF has invested $3.5bn in ride-hailing app Uber, while Saudi Arabian billionaire Prince Alwaleed bin Talal owns 5 per cent of Twitter.

Technology investments are not just clever moves. They also help transfer technology to local economies, which falls within the mandate of Mubadala.

The Abu Dhabi strategic investor has already been successful in attracting big names to the UAE to develop local industries that need technology. These include Al Ain-based aerospace company Strata, a unit of Mubadala which is manufacturing parts for Airbus and Boeing aircraft through contracts that will generate Dh16n in work up to 2030.

Mubadala may be a global investor but it is also a national champion that will develop industries aimed at creating jobs and new revenue streams for the UAE, which has an ambitious diversification agenda.

Investing in technology is the right tool for an economy that wants to be a leader in emerging industries and Mubadala is leading the way.