sovereign wealth funds
first to rescue the likes of Western banks. Funds snapped up stakes in several banks including Barclays, Credit Suisse, Citigroup and Merrill Lynch. Mubadala buys into EMI Despite the caution; there has been some action. Abu Dhabi’s investment fund Mubadala recently became partowner of struggling music giant EMI – ending months of drawn out negotiations. The London - based group is being split in two after 80 years as an inde-
need to determine the roles of the label versus the role of the management.” Diversification strategy Mubadala, the Arabic word for ‘exchange’ was established in 2002 by the Government of Abu Dhabi, with a mandate to facilitate the diversification of Abu Dhabi’s economy. Under Abu Dhabi’s Economic Vision 2030, officials plan to cut the emirate’s reliance on oil to 36 per cent of GDP by 2030. And it is paying off; non-oil activity was the biggest driver of the
date, Mubadala’s core asset is a 51% stake in Gulf-based gas and liquids project Dolphin Energy and it also oversees Masdar, Abu Dhabi’s green city project. Mubadala may have deep pockets, but it is not immune to the global economy, and the SWF is picking its business partners carefully. It is well aware of its burgeoning young population, more than half of the GCC is under 30 years of age. This growing population presents many unlocked business opportunities – and Mubadala wants to be there to foster the
“ There are so many ways to monetize music,
Gallo Images / Getty Images
and it is interesting to see asset managers going after that space.”
pendent British music company after finally reaching a $4.1 billion consortium deal led by Japan’s Sony and Vivendi’s Universal Music. “We plan to acquire EMI’s recorded music division on attractive terms, adhering to our principle of total financial discipline,” Vivendi Chief Executive Jean-Bernard Levy said in a statement. It marked Sony’s biggest acquisition since 1989 when it bought out Columbia Pictures in a deal worth just short of $5 billion. “It is good to see asset management companies getting involved,” Mike McGuire, Vice President of Gartner’s Media Industry Advisory Services told Global Citizen. “They obviously see some value in the catalog, and they see the opportunities. There are so many ways to monetize music, and it is interesting to see asset managers going after that space.” He added that buyout firms have significant backgrounds in being able to help businesses streamline, “They now
emirate’s GDP last year, despite rising oil output. Non-oil activity accounted for more than half of growth last year, contributing 50.3% to GDP. Described by Mubadala CEO Khaldoon al-Mubarak as having a “unique mandate” to act as a “catalyst for economic diversification,” the group’s investments now encompass much more than oil and gas, and includes aerospace interests at home and abroad. The $45 billion Sovereign wealthy fund is also heavily invested in property and communications -- and it owns a stake in Ferrari. Despite its international man-
January / February 2012 • GC • 15
talent of the future, and capitalize on it. “There is huge potential here. A number of people wanted to partner EMI to be able to tap into the desire that young people have, and to be able to provide them a service that is potentially very valuable,” said McGuire. This new conservative approach from the wealthy from Abu Dhabi to Qatar may see less buyouts in Europe until the future of the 27-member bloc becomes more apparent, and until a credible plan is devised to tackle the debt crisis we may see funds shun Europe in favour of more stable economies in the East.