Abu Dhabi’s Sheikh Tahnoon is running an empire of private and state assets
ALBAWABA – Having recently become the face of the United Arab Emirates' (UAE) global aspirations, Abu Dhabi’s Sheikh Tahnoon is running an empire worth more than one trillion dollars in private and state-owned assets.
In the past few months, Sheikh Tahnoon bin Zayed gained control of the largest sovereign wealth fund in the UAE, Bloomberg reported Tuesday. This latest expansion of the Sheikh’s domain places the assets he oversees at almost $1.5 trillion.
Notably, Shiekh Tahnoon is one of Abu Dhabi’s two deputy rulers, the UAE’s national security adviser and brother to the president, and is now in charge of two wealth funds.
He runs the region’s most important private investment firm, the country’s largest lender and the Emirates’ biggest listed corporation.
More so, the Sheikh has sought investments in everything from technology to finance, with varying degrees of success, making him the defacto business chief of the wealthy Emirati royal family.
As a result, he has gained access to seemingly endless reserves of cash in the Organization of Petroleum Exporting Countries (OPEC) third-largest producer.
The rise of Abu Dhabi’s Sheikh Tahnoon
“The UAE leadership has recognized its most important source of statecraft is financial,” said Karen Young, a senior research scholar at Columbia University’s Center on Global Energy Policy. “It has the economic means to secure itself, to project power and to shape the politics around it in ways that it could never achieve with its small size or military power alone”.
“Sheikh Tahnoon is now the strategist behind multiple economic statecraft tools and the ability to use economic means of foreign policy support,” she told Bloomberg.
This handout image provided by the UAE Ministry Of Presidential Affairs on January 16, 2023 shows South Korea's Minister of Trade, Industry, and Energy Changyang Lee (C), UAE Deputy Prime Minister and Minister of the Presidential Court Sheikh Mansour bin Zayed al-Nahyan (L), and the Private Affairs Advisor in the Presidential Court Sheikh Mohamed bin Hamad bin Tahnoon al-Nahyan (R) attending a presentation during a visit to the Barakah Nuclear Energy Plant in al-Dhafra region of the Gulf emirate of Abu Dhabi. (Photo by Mohamed AL-HAMMADI / UAE's Ministry of Presidential Affairs / AFP)
Earlier considerations to buy Standard Chartered Plc and Lazard Ltd. at the start of this year, though unsuccessful, highlighted the scale of the Sheikh’s ambitions.
He also invested in TikTok Inc.’s Chinese owner ByteDance Ltd. and established a $10 billion fund targeting opportunities in tech. Not to mention an agreement to bankroll Misra’s new $6.8 billion vehicle and a takeover of Colombia’s largest food-maker in partnership with billionaire banker Jaime Gilinski.
G42, a Tahnoon enterprise, is also partnering with Cerebras Systems Inc., which recently built the first of nine AI supercomputers as an alternative to systems using Nvidia Corp. technology.
In terms of state-owned entities, Sheikh Tahnoon also oversees two Abu Dhabi wealth funds.
Abu Dhabi’s Sheikh Tahnoon is reshaping UAE’s sphere of influence
It seems that the Sheikh is more inclined to invest in growth markets, such as Asia, according to Bloomberg.
Reports show G42’s tech fund is building teams in Asian cities, including Shanghai, to scout for investment opportunities.
However, considering the latest measures by the United States (US), it is likely that some of Abu Dhabi’s investment vehicles could run into some obstacles. Especially as the US Committee on Foreign Investment broadly conducts more thorough checks on deals by international investors with business ties to the Chinese government.
On the other hand, his private investment firm Royal Group has long prized India. Executives there have described the country as the potential growth engine of the next decade, unnamed sources told Bloomberg.
In the meantime, G42 has also been in advanced discussions to expand its human genome project to countries across Africa and Asia, the sources said.
Sheikh Tahnoon’s International Holding Co. is actively exploring opportunities in emerging markets, the Abu Dhabi conglomerate’s chief executive officer Syed Basar Shueb told Bloomberg.
Shueb, one of the Sheikh’s top lieutenants, said joining BRICS would allow the country to strengthen its global partnerships.
A handout image provided by the UAE Ministry of Presidential Affairs shows Ethiopia's Prime Minister Abiy Ahmed (C), flanked by German President Frank-Walter Steinmeier (L), offering condolences to UAE National Security Advisor Sheikh Tahnoon bin Zayed al-Nahyan (R) at the Presidential Airport in Abu Dhabi on May 15, 2022. (Photo by Rashed AL-MANSOORI / Ministry of Presidential Affairs - Abu Dhabi / AFP)
Recently, Sheikh Tahnoon was handed control of Abu Dhabi Investment Authority (ADIA) following a reshuffle in March.
The $993 billion ADIA is among the world’s largest wealth funds and ranks as the second-biggest spender on deals among regional peers since the start of 2022. Saudi Arabia’s Public Investment Fund tops the list, according to data from Global SWF.
Meanwhile, Sheikh Tahnoon’s other vehicles, including the secretive Royal Group, have splashed out billions more.
The UAE has signed a string of agreements to invest in Asian and African economies, including in Indonesia where G42 and Dalio have held discussions about partnering to help build the new capital city. Regionally, the royal has been at the forefront of investments in Egypt and, more recently, Turkey — where the Gulf country has pledged to pump in more than $50 billion.
“There’s definitely a geo-strategic component to some of Abu Dhabi’s overseas investment,” said Steffen Hertog, an associate professor at the London School of Economics.
“Given Sheikh Tahnoon’s security background and role as high-level emissary in the MENA region in particular, you’d expect the funds under his control to incorporate such dimensions,” Hertog explained.
Sheikh Tahnoon’s influence has, of course, been felt locally too.
Abu Dhabi’s Sheikh Tahnoon is a force of nature, at home too
A key part of his empire is IHC, which has morphed into a $240 billion behemoth from an obscure fish farming firm in just a few years.
IHC is now twice the size of Goldman Sachs Group Inc. and Blackstone Inc. Still, that hasn’t enticed many international investors and IHC still isn’t covered by the analysts tracked by Bloomberg.
“IHC's commitment to transparency is evident in its 'day-to-day' business activities, which include consolidating real estate assets and forming strategic collaborations that drive synergies and value,’’ CEO Shueb said in written comments.
“These activities allow IHC to unlock new opportunities and maximize the potential of its assets on both local and international levels,” he noted.
The firm’s surging stock price has helped buoy the local bourse, which has rallied 92 percent since the start of 2020.
As investors flee emerging markets, with the benchmark MSCI index down about 11 percent, the Abu Dhabi Exchange, owned by ADQ (Abu Dhabi Developmental Holding Company), added over $600 billion to its market capitalization, which stands at about $750 billion as of the end of last week, according to Bloomberg.
Some of those gains came with deals that involved the Sheikh’s private holdings and the sovereign wealth funds he oversees.
Britain's back-then Prince Charles, (R) meets Sheikh Sultan bin Tahnoon Al Nahyan, the head of Abu Dhabi's tourism authority, at Clarence House in London, on July 15, 2009. (Photo by KIRSTY WIGGLESWORTH / POOL / AFP)
The latest example, which involved ADQ and IHC, created a $12 billion real estate behemoth. And earlier this year, the two firms also inked a partnership with the $73 billion private equity giant General Atlantic on a new venture to invest in alternative assets.
Sheikh Tahnoon’s “financial vehicles also serve to create new entities that generate wealth for next-generation members of the ruling family and to secure the dominance of state-related entities within a wider market system,” Columbia University’s Young said.
The emirate has become a hub of dealmaking, with Sheikh Tahnoon being central to the city’s efforts at leveraging its expanding financial influence to draw more billionaires. Inclunding but not limited to Bridgewater Associates founder Dalio, who is setting up a branch of his family office in Abu Dhabi and partnering on deals with Sheikh Tahnoon, as reported by Bloomberg.
Even as a diplomatic trouble-shooter for his brother, the president, Sheikh Tahnoon has also helped his country push into geopolitically significant markets around the world with finesse.
As Gulf oil wealth flows to all corners of the globe, backing mega mergers, propping up economies and upending the world of sport, Sheikh Tahnoon’s moves have positioned him as one of the world’s most influential dealmakers.
