Abu Dhabi sovereign wealth fund Mubadala Investment Co. will avoid investing in Russia for now, a sign that the war in Ukraine is complicating ties between Moscow and the UAE.
"Obviously, in this environment, we have to pause investment in this market in Russia," Mubadala Investment Co. CEO Khaldoon Al Mubarak told an investment conference in Dubai. "Pause and wait to see how the situation settles."
Mubadala is the first sovereign wealth fund from the Middle East to offer public comments on the month-old war.
"What is happening in this crisis between Russia and Ukraine is a travesty, with catastrophic consequences, in terms of human life and in terms of the impact it's having on economies all over the world," Mr. Al Mubarak said. "There's no question it is in the best interest of the whole world this crisis ends now."
The United Arab Emirates, of which Abu Dhabi is the capital, has taken a careful political position aimed at maintaining its ties with Russia even as the U.S. and Europe apply unprecedented sanctions. Like other regional crude exporters, the UAE is part of the OPEC+ oil alliance with Russia and has said it remains committed to this.
Middle Eastern investors like Mubadala have in recent years been increasing their allocation into Russia, while European and North American funds retreated because of the geopolitical risks, according to data from Global SWF.
While some sovereign investors such as Norway's $1.3 trillion fund have been offloading Russian assets from its portfolio, Mubadala and its Qatari peer are holding on to their investments in the country, Bloomberg has previously reported.
A spokesman for Mubadala said Russia represents less than 1% of the Abu Dhabi fund's $243 billion portfolio.
Mubadala is a long-term investor in the Russian economy and has an office in Moscow with more than 20 people, according to its website. The wealth fund has a portfolio of about 50 investments there in sectors such as infrastructure, real estate, commodities, banking and technology. It also has a partnership with the Kremlin-run Russian Direct Investment Fund, the website says.
