Abu Dhabi is combining two of its investment firms to create a wealth fund with assets of about $250 billion as the oil-rich emirate moves ahead with consolidation of state-controlled companies, according to state-run WAM news agency.
Abu Dhabi Investment Council will become part of Mubadala Investment Co., in line with Abu Dhabi’s efforts to accelerate economic diversification in the United Arab Emirates, said Mohammed Bin Zayed Al Nahyan, Abu Dhabi’s crown prince and chairman of Mubadala said in a statement.
“Merging the funds make sense. They could be looking to create, among the companies they own or control, bigger players that can compete on a larger scale and become global companies,” said Issam Kassabieh, senior financial analyst at Mena Corp. Financial Services in Dubai, according to Bloomberg.
Consolidation among Abu Dhabi institutions has been picking up. Mubadala completed a merger with International Petroleum Investment Co. last year, making it the world’s 14th-largest fund with $125 billion of assets, according to the Sovereign Wealth Fund Institute. Abu Dhabi Investment Council has assets of $123 billion, according to the SWFI.
Issa Mohammed Al Suwaidi will remain chief executive officer of Abu Dhabi Investment Council and will report to Mubadala Group CEO and Managing Director Khaldoon Khalifa al Mubarak. Mubadala’s board will assume management responsibility of the council.