UAE wealth fund behind $10bn Israel plans to seek deals

(Bloomberg) – The UAE’s top wealth funds have considered expanding into Israel to advance up to $10 billion in investments over the next decade, according to three people familiar with the talks, in this which would be the biggest cash pledge since the standardization of tie nations.

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Sovereign investors include Mubadala Investment Co. and $243 billion ADQ, said two of the people, who asked not to be identified in confidential talks between Israeli and UAE officials. Talks are in their early stages, they said.

Also on the agenda is the possibility that the funds could open offices in Israel to invest in local venture capital firms, businesses and public projects, according to one of the people. The ADQ plans to invest about $2 billion in total through the Abu Dhabi Growth Fund, which sits at its Abu Dhabi headquarters, according to two of the people.

It was not immediately clear which funds would make up the remainder of the $10 billion total. Abu Dhabi Investment Authority, the largest wealth fund in the United Arab Emirates with nearly $700 billion in assets under management, is also looking to invest in Israel, two of the interviewees said.

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ADIA and Mubadala declined to comment. The ADQ did not respond to a request for comment.

By the time the UAE and Israel signed their landmark agreement in late 2020, years of quiet security cooperation had laid the foundation for the diplomatic, defense and economic ties each sought to deepen. Shared concern over regional heavyweight Iran and its nuclear program provided much of the impetus. In January, Israel offered the United Arab Emirates security and intelligence support after a deadly drone strike by Iran-backed fighters in Yemen.

In recent months, the diplomatic arena has been busy with the visit of Israeli Prime Minister Naftali Bennett and President Isaac Herzog to the United Arab Emirates. The Gulf nation’s de facto leader, Sheikh Mohammed Bin Zayed Al Nahyan, has been invited to pay a reciprocal visit.

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Cross-border trade has steadily grown, crowned by Mubadala’s recent $1 billion purchase of a stake in Israel’s second-largest natural gas field. The ADQ, one of the UAE’s newest sovereign wealth funds with assets under management estimated at $110 billion, has previously invested in Israeli lab-grown meat company Aleph Farms.

The figures cited by wealth funds in the United Arab Emirates would add to what has been a record fundraising by Israeli tech companies, with startups alone attracting around $26 billion last year. Global investors, from Soft Bank Group Corp. at Blackstone Inc., are opening local branches to better spot offers.

A number of UAE-based companies and funds have opened offices in Israel, including the artificial intelligence and cloud computing company G42, and the Abu Dhabi investment office, run by the ‘State. And one of Israel’s fastest-growing tech companies, Rapyd, is opening an office in Dubai to attract international talent to circumvent the chronic labor shortage plaguing the industry in its country. .

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Other bilateral agreements have stalled and some of the major investments promised have not yet materialized. Israel’s energy minister wants her country to cancel a pipeline deal with a group of Emirati investors over environmental concerns, casting doubt on the politically sensitive deal struck with Israel’s previous government.

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