HONG KONG -- Abu Dhabi's sovereign wealth fund Mubadala Investment Co. is looking to invest in Asian startups working in artificial intelligence, biotechnology, semiconductors and aerospace as part of a wider plan to create a technology hub in the United Arab Emirates and diversify its economy.
One of the world's largest state-owned investment funds, Mubadala manages over $250 billion in assets and has already invested in Chinese technology unicorns, including AI company Sensetime and car-hailing app Didi Chuxing, via the SoftBank Vision Fund. Mubadala was among the earliest backers of the Vision Fund, with a $15 billion commitment in 2017.
"We definitely have the appetite to considerably increase our capacity in this region," said Khaldoon Khalifa Al Mubarak, chief executive of Mubadala, in a recent interview with the Nikkei Asian Review on the sidelines of the Bloomberg Asia Invest conference in Hong Kong.
Without giving a specific figure, Al Mubarak said Mubadala will "put in more capital" and "continue to invest through the Vision Fund" when expanding its portfolio in Asia. "The partnership with SoftBank has been very positive. We believe in Masa-san's vision and the quality of deal flow it can bring," he said, referring to Masayoshi Son, SoftBank Group's chairman and CEO.
Mubadala is a longtime investor in the U.S., Europe, and more recently in Asia. In 2015, Mubadala set up a $10 billion joint investment fund with China Development Bank Capital and the State Administration of Foreign Exchange to focus on investments in China and the UAE.
"The experience in Asia has opened up our eyes. We have found very interesting companies, very interesting opportunities and very exciting growth trajectories," Al Mubarak said.
But with valuations of Asian tech startups skyrocketing in recent years, Al Mubarak acknowledges that it has become more difficult to find new investments. He said the fund is also looking into less crowded sectors, ranging from satellites to agriculture to infrastructure, with a view to creating "a more balanced portfolio."
For now, Mubadala wants to corral the unicorns it has invested in. Together with the Vision Fund and Microsoft, Mubadala is leading a project to create a technology center, called Hub71, in Abu Dhabi's financial district. It hopes to entice the world's leading startups to set up offices in the city.
The government has set aside 1 billion UAE dirham ($ 272 million) for subsidies and co-investments in the hub's startups. The plan is the UAE's latest effort to diversify its economy away from oil and provide more job opportunities for youth, who tend to count on low-productivity government jobs for a livelihood.
"I believe data is the new oil," said Al Mubarak. "Companies building on data are very successful now and will be more successful in the future." He added that companies can use Abu Dhabi as a gateway to expand in the Middle East, and that Mubadala knows the region extremely well and has a strong track record. "I think that's a good fit for both," he said.
As a prominent investor in both the U.S. and China, Al Mubarak said he feels "no pressure" to grow in either country despite rising tension between the world's two largest economies. "We are uniquely positioned because we have very strong economic ties to both countries. We will continue to actively invest in both markets and I don't see any reason to shift from that approach," he said.