Abu Dhabi Royal’s company plans to invest $10 billion in the United States and Europe | Job Binary


(Bloomberg) — Royal Group, the investment firm led by Abu Dhabi’s royal family, is planning up to $10 billion in U.S. and European stocks and other assets, fueled by growing fears of a global recession.

The group, led by UAE national security adviser Sheikh Tahnoon bin Zayed Al Nahyan, sees this as an opportunity to offload some of its existing equity holdings, reduce its exposure to riskier assets and expand its global portfolio, according to people familiar with the UAE. thing.

While the final strategy is still being worked out, investments in stocks, fixed-income investments and tangible assets – such as real estate – are being considered, the people said, asking not to be identified because the plans are private.

Royal Group officials did not respond to requests for comment. A spokesperson for its listed subsidiary, International Holding Company PJSC, said the company is unable to comment on any matter on behalf of its shareholders.

Turning towards the United States and Europe would mean a change in strategy for Sheikh Tahnoon’s company, which until recently has prioritized investments across the developing world, especially in India. In contrast, Mubadala Investment Co. — the $250 billion Abu Dhabi investment fund headed by the emirate’s ruler Sheikh Mohammed bin Zayed — has just over 50% of its portfolio invested in the United States and Europe.

Broken stocks

Royal Group hopes to take advantage of share prices already under pressure, as expectations of a global economic downturn grow. The S&P 500 is down 23% this year, while European stocks fell last month after falling more than 20% from their January peak.

And even after this year’s misery — soaring inflation, the war in Ukraine, China’s recession — Bloomberg Economics expects 2023 could be worse. The IMF cut its forecast for global growth to 2023 on Tuesday, saying curbing high inflation could increase risks to the global economy.

Record Gulf funds flow into global deals as liquidity runs out

Any investment by Royal Group in the United States would come at a sensitive time in relations between Western powers and the Persian Gulf, with the White House condemning the latest oil production cut by OPEC+, in which the United Arab Emirates is a major player.

In neighboring Saudi Arabia, the 620 billion dollar public investment fund has increased its investments in the United States. PIF, as it’s known, is expanding its team in New York and recently invested more than $7 billion to build new investments in U.S. stocks as recession fears hit markets.

Financial empire

The Royal Group, which helps control one of the world’s largest family fortunes through a vast network of subsidiaries, has grown rapidly to form a financial empire that rivals the region’s largest investment funds. It has also become a key tool in the oil-rich Gulf state’s diversification strategy.

Abu Dhabi has consolidated more assets under the company’s umbrella and strengthened Sheikh Tahnoon’s position as the royal family’s top businessman under the rule of his older brother, UAE President Sheikh Mohammed.

In addition to holding the country’s top national security post, Sheikh Tahnoon also heads Abu Dhabi’s investment fund ADQ, artificial intelligence firm Group 42 and the country’s largest lender, First Abu Dhabi Bank.

(Updates in the sixth and seventh paragraphs)

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