Mubadala Steps Up US Deal‑making

North America leads the charge

Mubadala, Abu Dhabi’s second‑largest sovereign wealth fund, lifted capital deployment by 34 per cent last year, committing Dh119 billion (US$32.4 billion) as it doubled down on opportunities in the United States. The increase underlines the Gulf’s growing fire‑power in global deal‑making, even as higher interest rates and geopolitical uncertainty weigh on other investors.

North America accounted for the lion’s share of the action: Mubadala said its outlay in the region almost doubled, helping the now US$330 billion fund to be named 2024’s most active sovereign investor by data provider Global SWF. The push comes despite a jittery US economic outlook and illustrates Abu Dhabi’s desire to maintain close commercial ties with Washington regardless of who occupies the White House.

Earlier this year Abu Dhabi pledged to channel US$1.4 trillion into the US over the next decade. That show of faith will be reinforced next week when President Donald Trump visits the United Arab Emirates, where he is expected to court further Gulf investment.

Betting on future‑focused sectors

Chief executive Khaldoon al‑Mubarak said the 23‑year‑old vehicle had built a portfolio “designed to ride out market cycles and scale future‑focused sectors – from artificial intelligence and clean energy to life sciences and advanced manufacturing – all aligned with our national priorities”.

Mubadala owns half of Abu Dhabi’s specialist AI investor MGX alongside tech group G42, chaired by UAE national‑security adviser Sheikh Tahnoon bin Zayed al‑Nahyan. MGX last year backed a US$30 billion global infrastructure fund alongside BlackRock and Microsoft, part of a broader drive to position the emirate as a regional AI hub and secure access to advanced US‑made chips.

Shift to private equity and credit

The fund’s appetite for less liquid assets also increased. Private‑equity holdings rose to 40 per cent of total assets, up from 38 per cent a year earlier, while exposure to public markets fell to 23 per cent from 25 per cent. Mubadala’s private‑debt book has reached US$20 billion as it looks to exploit tighter credit conditions in developed markets.

Such shifts mirror a wider trend among sovereign investors seeking higher returns and more control through direct stakes. According to Deloitte, sovereign funds based in the energy‑rich Gulf now command roughly 40 per cent of global sovereign wealth.

Solid, if unspectacular, returns

Assets under management climbed nine per cent to Dh1.2 trillion and the fund produced a 10.1 per cent annualised return over the past five years – fractionally below the 10.3 per cent rate reported for the previous five‑year period. Mubadala does not disclose one‑year performance, arguing that headline numbers can mask long‑term progress.

Analysts say the latest figures are creditable given last year’s market volatility and underline the benefits of diversification away from listed equities. “They have been early movers in areas such as semiconductors and renewable power,” said one Abu Dhabi‑based adviser. “That is paying off now.”

Appetite undimmed despite valuations

Dealmakers report that Mubadala remains keen to write sizeable cheques in the US, but is being choosier on price. Several private‑equity houses said the fund had walked away from auctions where valuations looked stretched, preferring to negotiate directly or take minority stakes alongside partners.

Even so, the emirate’s deep pockets continue to attract suitors. Wall Street bankers say talks cover everything from data‑centre roll‑outs and life‑science platforms to distressed real‑estate loans. One person involved said Mubadala’s ability to commit quickly “can tilt a competitive process in their favour”.

Outlook

With oil revenues still buoyant and Abu Dhabi’s leadership intent on exporting capital, few expect Mubadala’s spending spree to slow. The bigger question is whether the fund can keep scaling its AI and clean‑energy bets without diluting returns.

For now, the numbers suggest its strategy is working: a larger portfolio, steady performance and a greater presence in the world’s biggest market. As rivals retrench, Mubadala is using its balance‑sheet strength to seize the moment – and to signal that the Gulf’s investment ambitions are only getting started.