Abu Dhabi weighs folding China assets held by Mubadala, L'Imad into a single investment vehicle

Abu Dhabi may put its China wagers under one roof: The emirate’s leadership is considering folding China-focused assets held by Mubadala and L’Imad Holding into a new investment vehicle, Bloomberg reports, citing people it says are familiar with the matter. The goal is to ensure multiple arms of the emirate aren’t tripping over each other’s feet as Abu Dhabi looks to deepen its exposure to the world’s second-largest economy, the business information service cites a source as telling it.

We saw this coming: We said last week that the UAE’s many investment arms would launch a China-focused investment platform after Abu Dhabi Crown Prince Khaled bin Mohamed bin Zayed Al Nahyan led a visit to Beijing. The stop included a symbolically important grip-and-grin with Xi Jinping. The UAE in general — and Abu Dhabi specifically — has been pushing to deepen ties with China.

Abu Dhabi wants a bigger China footprint, but it doesn’t want to bid against itself. Mubadala has invested more than USD 20 bn across 100+ transactions since 2015, while L’Imad inherited additional exposure through ADQ-linked assets transferred earlier this year. Mubadala has also said it wants Asia to account for roughly 25% of its portfolio by decade-end.

IN CONTEXT: Abu Dhabi stepped back a bit from Beijing under pressure from Washington as it sought clearance for key AI investments. With a commitment to building the largest AI facility outside the United States now in the bag and Washington distracted by a war in Iran, Abu Dhabi has a freer hand to court China. Competition from Saudi Arabia is also a factor in the UAE’s push: Saudi accelerated a full-court press for Chinese investment in 2024, courting FDI in manufacturing and advanced technologies, stepping up oil sales, and launching a bid to convince Chinese capital to flow into Tadawul via Hong Kong-listed exchange-traded funds.

BACKGROUND- Abu Dhabi has been restructuring its sovereign portfolio for more than a year now. The past few months alone have seen some of Abu Dhabi’s biggest names consolidating and merging their holdings. IHC recently formed Judan Financial, its financial services powerhouse with over AED 870 bn (USD 237 bn) in AUM, while at the end of last year it folded three of its subsidiaries together. ADQ was also consolidated under L’imad Holding, the UAE’s newer sovereign investment platform, at the start of this year.