A prominent Abu Dhabi royal-controlled investment company, Royal Group, intends to invest up to $10 billion in US and European stocks and other assets that are suffering from growing recessionary fears.
According to people familiar with the situation, the group, which is led by the United Arab Emirates National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan, views this as an opportunity to sell off some of its current equity holdings, lessen its exposure to riskier assets, and broaden its global portfolio.
The persons, who asked to remain anonymous since the plans are secret, said that investments in equities, fixed income, and tangible assets, such as real estate, are all being examined even if the ultimate strategy is still being developed. Requests for feedback from Royal Group representatives went unanswered. International Holding Company PJSC, its listed subsidiary, is not in a position to make any comments on behalf of its shareholders, according to a representative for the company.
Sheikh Tahnoon’s company’s strategy would change if it made a turn toward the US and Europe. Up until this point, it had prioritised investments in the developing world, especially India. The ruler of the emirate, Sheikh Mohammed bin Zayed, heads the $250 billion Abu Dhabi wealth fund Mubadala Investment Co., which has slightly more than half of its portfolio invested in the US and Europe.
As predictions of a global economic slowdown mount, Royal Group hopes to profit from share prices that are already under pressure. The S&P 500 Index has fallen 23% so far this year, and European stocks entered a bear market this month after falling more than 20% from their peak in January.
Any investment drive by Royal Group into the US would take place at a sensitive time for ties between Western powers and the Gulf, as the White House has denounced the most recent oil output cut by OPEC+, in which the UAE plays a significant role.
The $620 billion Public Investment Fund has increased its exposure to the US in neighbouring Saudi Arabia. As markets were hammered by recession fears, the PIF, as it is known, recently invested more than $7 billion to create fresh positions in US companies. The PIF is also growing its staff in New York.
Through a substantial network of subsidiaries, Royal Group, which assists in managing one of the largest family fortunes in the world, has swiftly increased its influence and amassed a financial empire that rivals the top wealth funds in the area. Additionally, it has developed into a crucial tool for the oil-rich Gulf state’s diversification plan.
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