Ka-ching! IPIC scored big for Team Abu Dhabi this week when it sold part of its stake in Barclays, the British bank.
Readers may recall that at the height of the financial crisis last October, Barclays raised £7 billion (Dh42.55bn) in an effort to stay afloat without taking money from the British government, and with it all the strings that would have been attached.
Instead, it ended up with two other government shareholders, Qatar (whose Qatar Investment Authority already held Barclays stock) and Abu Dhabi, through IPIC, otherwise the International Petroleum Investment Company.
The deal gave Abu Dhabi a roughly 16 per cent stake in the bank, and sent Barclays' other shareholders into paroxysms over a deal they complained had been made behind their backs.
The Middle-Eastern capital infusion seemed to do the trick, though. Barclays survived and, along with other big banks that avoided British government aid, has recovered quite nicely. Barclays stock has almost doubled since the investment from Abu Dhabi. IPIC's sale of 1.3 billion Barclays shares netted it a tidy £1.5bn, representing a roughly 75 per cent return in just seven months, an annualised return of about 128 per cent.
It's nice to see the home team hit one out of the park every once in a while, particularly after suffering a string of gut-wrenching losses. Most of Abu Dhabi's sovereign wealth funds (SWFs) don't bother to publicise their financial scorecard, but Mubadala Development broke ranks in April to report Dh8.8bn (US$2.39bn) in write-offs due to the falling value of investments such as its stake in General Electric. That loss alone offsets IPIC's entire Barclays windfall.
And there is, of course, that other big bank buy, the Abu Dhabi Investment Authority's $7.5bn investment in Citigroup, which if ADIA had to convert into shares today would yield a loss of almost 90 per cent thanks to Citi's falling share price. Fortunately for ADIA and for Abu Dhabi it doesn't have to, which means the share price will hopefully regain ground while ADIA continues to collect its 11 per cent in annual interest on the deal in the meantime. Still, the paper losses at Citi are just a taste of what analysts estimate ADIA has suffered during the global financial blowout. ADIA's war-chest, once conservatively reckoned to hold assets of almost $500bn, was most recently estimated by the Monitor Group to have shrunk to just $282bn.
Monitor did not take a stab at IPIC's holdings, but last year they were estimated at $13bn, almost all of it in petroleum-related assets abroad. Oil is still fetching only about half the price it did a year ago, however. The Barclays cash will help offset those declines.
The real question for IPIC's managers now, though, is what to do with their $2.5bn windfall. While the Barclays deal may have been the kind they could not refuse at the time, investing in banks lies fairly far from IPIC's remit. IPIC was established to invest abroad in oil assets, thus diversifying Abu Dhabi's exposure to domestic petroleum-related risks such as dwindling reserves, or Martians landing on the Corniche and demanding tribute in the form of light frappuccinos.
There has been a growing number of calls, however, for Abu Dhabi's SWFs to invest more of their money directly here at home as a way to support the domestic economy and offset the impact of the global financial crisis.
This view represents a fundamental misunderstanding of the nature and purpose of the emirate's various SWFs. Advocates of more domestic investment say the funds have a responsibility to support the domestic economy. This is untrue. There is only one fund whose mandate includes the development of Abu Dhabi's economy, Mubadala. Most of its investments are strategic investments in industries it believes will not only promote that development over the long term, but which will also earn money for its shareholder in the process. Buying domestic stocks might make sense for Mubadala, but only as part of its own treasury operations, not to promote economic development.
This raises the other common fallacy over SWFs, that they are somehow not accountable and have a duty to support the local economy. Abu Dhabi's other sovereign funds may not publish financial statements, but there is little doubt that they are accountable to their shareholder, the Abu Dhabi Government. Top government officials, after all, sit on each one of their boards and oversee their key investments.
The SWFs belong exclusively to the Abu Dhabi Government, and some mistakenly confuse this with being public. Wrong again. The public's claim over Abu Dhabi's SWFs is equivalent to the amount the public pays in taxes to the Government, that is, zero. Neither does the public have any claim over the oil assets whose proceeds serve as the basis for the funds. Those assets belong to the Government.
And however much one may wish it otherwise, l'etat most definitely n'est pas nous.
Obviously, the funds' shareholders can decide whether the funds should invest locally or not, but asking them to do so would abrogate their structure and purpose. The Abu Dhabi Fund for Development was created to promote development in poor nations around the region. The Abu Dhabi Retirement Pensions and Benefits Fund needs to fund its own liabilities, not divert funds for domestic pump priming. IPIC and its sister energy fund, Taqa, are tasked with creating global energy portfolios.
In other words, all the funds are designed to preserve value and offset domestic risk. They are not tools of domestic fiscal policy. Thus, when the Abu Dhabi Government needs to fund a fiscal deficit, it can and in the past has, withdrawn funds from ADIA. It does not generally use ADIA as an instrument of domestic policy.
In fact, ADIA's raison d'être, and that of its younger sister, the Abu Dhabi Investment Council, has been to offset Abu Dhabi's exposure to the risk that domestic issues, whether shortcomings in domestic economic policy or the emirate's inescapable exposure to oil prices and regional political risk, torpedo the value of its petrodollar savings.
There are many economists, including those at the IMF, who have called for the UAE to boost its fiscal spending. But those who think SWFs are the tool for doing this need to think again.
warnold@thenational.ae
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
Jordan cabinet changes
In
- Raed Mozafar Abu Al Saoud, Minister of Water and Irrigation
- Dr Bassam Samir Al Talhouni, Minister of Justice
- Majd Mohamed Shoueikeh, State Minister of Development of Foundation Performance
- Azmi Mahmud Mohafaza, Minister of Education and Minister of Higher Education and Scientific Research
- Falah Abdalla Al Ammoush, Minister of Public Works and Housing
- Basma Moussa Ishakat, Minister of Social Development
- Dr Ghazi Monawar Al Zein, Minister of Health
- Ibrahim Sobhi Alshahahede, Minister of Agriculture and Minister of Environment
- Dr Mohamed Suleiman Aburamman, Minister of Culture and Minister of Youth
Out
- Dr Adel Issa Al Tawissi, Minister of High Education and Scientific Research
- Hala Noaman “Basiso Lattouf”, Minister of Social Development
- Dr Mahmud Yassin Al Sheyab, Minister of Health
- Yahya Moussa Kasbi, Minister of Public Works and Housing
- Nayef Hamidi Al Fayez, Minister of Environment
- Majd Mohamed Shoueika, Minister of Public Sector Development
- Khalid Moussa Al Huneifat, Minister of Agriculture
- Dr Awad Abu Jarad Al Mushakiba, Minister of Justice
- Mounir Moussa Ouwais, Minister of Water and Agriculture
- Dr Azmi Mahmud Mohafaza, Minister of Education
- Mokarram Mustafa Al Kaysi, Minister of Youth
- Basma Mohamed Al Nousour, Minister of Culture
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
MATCH INFO
Liverpool 4 (Salah (pen 4, 33', & pen 88', Van Dijk (20')
Leeds United 3 (Harrison 12', Bamford 30', Klich 66')
Man of the match Mohamed Salah (Liverpool)
Company%20profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Fasset%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2019%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Mohammad%20Raafi%20Hossain%2C%20Daniel%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%3C%2Fstrong%3E%20%242.45%20million%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2086%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-series%20B%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Investcorp%2C%20Liberty%20City%20Ventures%2C%20Fatima%20Gobi%20Ventures%2C%20Primal%20Capital%2C%20Wealthwell%20Ventures%2C%20FHS%20Capital%2C%20VN2%20Capital%2C%20local%20family%20offices%3C%2Fp%3E%0A
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The Bio
Ram Buxani earned a salary of 125 rupees per month in 1959
Indian currency was then legal tender in the Trucial States.
He received the wages plus food, accommodation, a haircut and cinema ticket twice a month and actuals for shaving and laundry expenses
Buxani followed in his father’s footsteps when he applied for a job overseas
His father Jivat Ram worked in general merchandize store in Gibraltar and the Canary Islands in the early 1930s
Buxani grew the UAE business over several sectors from retail to financial services but is attached to the original textile business
He talks in detail about natural fibres, the texture of cloth, mirrorwork and embroidery
Buxani lives by a simple philosophy – do good to all
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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5
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3C%2Fstrong%3E%3A%20ASI%20(formerly%20DigestAI)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Quddus%20Pativada%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Artificial%20intelligence%2C%20education%20technology%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%243%20million-plus%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20GSV%20Ventures%2C%20Character%2C%20Mark%20Cuban%3C%2Fp%3E%0A
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
ENGLAND TEAM
England (15-1)
George Furbank; Jonny May, Manu Tuilagi, Owen Farrell (capt), Elliot Daly; George Ford, Ben Youngs; Tom Curry, Sam Underhill, Courtney Lawes; Charlie Ewels, Maro Itoje; Kyle Sinckler, Jamie George, Joe Marler
Replacements: Luke Cowan-Dickie, Ellis Genge, Will Stuart, George Kruis, Lewis Ludlam, Willi Heinz, Ollie Devoto, Jonathan Joseph
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
Read more about the coronavirus
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
Hunger and Fury: The Crisis of Democracy in the Balkans
Jasmin Mujanović, Hurst Publishers
MEYDAN%20RACECARD
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UAE currency: the story behind the money in your pockets
Red Joan
Director: Trevor Nunn
Starring: Judi Dench, Sophie Cookson, Tereza Srbova
Rating: 3/5 stars
