Abu Dhabi invests in UK life sciences
Sovereign wealth fund Mubadala has injected £800m into a $1bn partnership with the government to invest in the UK life sciences programme – the latest buy-in in the UK as part of its global investment strategy
Family jewels
In March 2021, the UK government came to an agreement with Abu Dhabi’s sovereign wealth fund, the Mubadala Investment Company, that will see $1bn invested in UK life sciences over the next five years. Mubadala has committed £800m to be invested alongside the UK’s £200m Life Sciences Investment Programme, which was announced last year.
The agreement was negotiated by the Department for International Trade and the recently established UK Office for Investment. The latter will work with Mubadala to identify innovative businesses that are commercially viable. Mubadala has come to similar agreements in other territories.
International Trade Secretary Liz Truss suggested that investment would be directed to help with the government’s ‘levelling up’ agenda. “From Liverpool and Edinburgh to Oxford and Nottingham, our world-class life sciences clusters and innovative businesses will see the benefits of this partnership,” she said.
Lord Gerry Grimstone, the UK’s investment minister, told the Financial Times that he was “expecting equal or better opportunities to be found in those sectors”. He added: “We think the future opportunities are very, very sizeable.”
National treasure
Managing director and group CEO of Mubadala, Khaldoon Khalifa Al Mubarak, is no stranger to investing in the UK. He has been chairman of Manchester City FC since it was taken over by the Abu Dhabi United Group (ADUG) in 2008. During this period, the club has won the English Premier League four times (and looks set to win again this season) – having finished top of the pile just twice in the previous 128 years.
The 2008 acquisition cost a reported £210m, one quarter of the new commitment to life sciences. Buoyed by the success of the Manchester City investment, ADUG has taken stakes in football clubs across the globe: New York City in the US; Melbourne City in Australia; Yokohama F Marinos in Japan; Montevideo City Torque in Uruguay; Girona in Spain; ESTAC Troyes in France; Lommel SK in Germany; Mumbai City in India; and Sichuan Jiuniu in China.
Global ambition
Mubadala’s pledge to invest in UK life sciences is part of a global investment strategy for the sovereign wealth fund. North America is the biggest recipient of its investment, with 38% of its $232.2bn assets under management around the world – UAE 28%, Europe 20%, Asia 9%, Australia and South America 2% each, and Middle East and North Africa 1%.
Mubadala still has significant investments in oil, metals and mining. But in April 2021, chief executive al-Mubarak told the Financial Times that there would be more sell-downs in “legacy commodity sectors” and more investment in tech and healthcare: “Life sciences, that’s a sector we know is going to be growing immensely.” Partnerships are a key part of its strategy – for example, in the UK with Shell, Rolls-Royce and Imperial College London, and in the US with Silver Lake and Google.
Heavyweight hires
In October 2019, Mubadala Ventures Europe (a subsidiary of Mubadala Capital) geared up for investment across the continent by bolstering its London-based team. The venture unit has a €400m fund, targeting early growth investments, and start-ups and founders with veteran hires.
James Peck joined as a partner and head of operations from Richard Branson’s family office, where he managed the Virgin brand portfolio. Former Octopus Ventures partner and Vodafone strategy and M&A manager Frederic Lardieg joined as a partner. Mangrove Capital Partners co-founder and CEO Mark Tluszcz also joined as a senior adviser.
About the article
This originates from the Corporate Financier May 2021 edition. Access our highly regarded magazine, and our extensive archive brought to you by the ICAEW Corporate Finance Faculty.