UAE to invest £10bn in British infrastructure

Boris and Prince Mohammed bin Zayed al-Nahyan

The United Arab Emirates plans to invest £10 billion in Britain over the next five years, targeting sectors including clean energy, infrastructure, technology and life sciences.

Mubadala, an Abu Dhabi sovereign wealth fund, made the investment commitment today, saying it would “help accelerate funding and innovation in key sectors that are foundational to economic growth” of both the UK and UAE.

The announcement was made as Abu Dhabi’s Crown Prince Mohammed bin Zayed al-Nahyan visited Boris Johnson in London.

The fund marks an expansion of Mubadala’s Sovereign Investment Partnership with Britain’s Office for Investment, agreed earlier this year. In March, Mubadala pledged to invest £800 million in life sciences with Britain’s investment office, which said it was contributing an additional £200 million.

Since then more than £1.1 billion has been deployed, including about £500 million in UK-based CityFibre to provide high-speed broadband. Other sectors the fund has invested in include regional, affordable housing, artificial intelligence into drug discovery, e-commerce and education.

Mubadala traces its roots back to 1983, when the International Petroleum Investment Company was formed to channel the UAE’s newfound oil resources into investments to support healthcare, manufacturing and education in the region. Mubadala Investment Company was formed in 2017 through the merger of International Petroleum Investment Company and Mubadala Development Company, another state-owned company, to create “an international development powerhouse” for the emirate.

Its investments have included stakes in Ferrari, the sports car company and Virgin Galactic, the space exploration company. It is also a significant investor in warehouses across Europe and owns the Viceroy hotels chain.

Khaldoon Al Mubarak, group chief executive of Mubadala, said: “We are already developing ambitious energy transition, technology and infrastructure investment programmes that create new jobs and strengthen commercial ties between our nations.”

Chris Brett, head of capital markets for Europe, the Middle East and Africa, at CBRE, a property consultancy, who has worked with Mubadala, said: “I would say they are a long-term investor looking for smart, sustainable investments to get a steady return on capital to protect the future of Abu Dhabi.”

The UK Office for Investment will act as an entry point to help identify the right sectors for Mubadala to invest in and help the fund to navigate Britain’s investment landscape.

Criteria for investment will be based on the potential for growth in sectors that are priorities for both the UK and UAE.

Lord Grimstone of Boscobel, the UK’s minister for investment, said: “Attracting investment has become globally competitive and there’s never been a better time to be taking part and investing in the UK.”

Mubadala has $243 billion in assets under management across more than 50 countries. It is the second biggest sovereign wealth fund in Abu Dhabi and third largest in the UAE.

Other key Gulf sovereign wealth funds include the Abu Dhabi Investment Authority and the Qatar Investment Authority, which have investments in Britain including real estate.