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First with Financial Comment from Arabia

Abu Dhabi’s Mubadala fund assets jump 75% to $24bn

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The investment community has an understandable fascination with the usually secretive world of Abu Dhabi sovereign wealth funds. But although these private, non-listed funds are hardly likely to throw open their books to public scrutiny, a lot more data is now being provided.

Yesterday the Mubadala Development Company posted its 2009 financials. The fund clearly benefited from the huge bounce in equity prices last year with a 75 per cent surge in totals assets to $24 billion under management.

Return to profit

The profit attributable to shareholders stood at $1.3 billion compared with a loss of $3.1 billion in 2008. Something described as ‘total comprehensive income’ for 2009 was $2.3 billion, with Dolphin Energy contributing $761 million to revenues.

CEO Khaldoon Khalifa Al Mubarak said: ‘We have a robust portfolio of businesses, a solid pipeline of projects, a ready access to diverse sources of funding coupled with strong support from our shareholder. This puts us in a unique position to realize value and further opportunities in 2010.’

Aside from Dolphin Energy, the fund holds stakes in Ferrari and the US private equity firm the Carlyle Group, UAE telecom company du, AMD and Aldar Properties.

But the main contributors to growth in revenues came from: SR Technics at $1.1 billion; $706 million from concession revenue from local universities; and $217 million from the sale of land on Sowwah Island.

Not surprisingly Mubadala has excellent credit lines and a $2.5 billion syndicated loan facility should be renewed within the next few weeks.

Rumors about Dubai stakes

Rumors continue to swirl in Dubai that Abu Dhabi funds are about to, or may have already, taken stakes in major local companies such as Emirates Airline, but these rumors are still vigorously denied. Nonetheless it is obvious that Abu Dhabi’s sovereign wealth funds are going to become more and more important in the development of the UAE in the future.

For these funds are the depositories for the vast accumulated oil wealth of the UAE. Here is the wealth saved for the benefit of future nations, and to ensure that passing downturns in the oil price have a lesser impact on the economy than otherwise.

In a world of debtor countries the UAE is a net creditor, even allowing for the huge debts of Dubai. That is a massive advantage is today’s world.

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Written by Peter Cooper

March 23, 2010 at 11:33 am

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