I've been thinking about writing on business, markets, and tech for quite a while now and what better way to start than with a topic that encompasses all of those things perfectly, Abu Dhabi's sprawling investment ecosystem.

Abu Dhabi has quietly become the world's wealthiest city for sovereign capital, managing approximately $1.7 trillion across just its sovereign funds. And significantly more when you consider the interconnected funds, holding companies, and specialized investment vehicles.

Understanding who does what is the first step to understanding how Abu Dhabi uses its capital. If you think about what the emirate wants, both short and long term, you can see four clear priorities: economic diversification away from oil, geopolitical stability in the Gulf and the broader Middle East, good financial returns (at least in the long term), and domestic technological and critical infrastructure sovereignty.

A mental model that works well is to think of the three main sovereign wealth funds of Abu Dhabi (ADIA, ADQ, and Mubadala) on a spectrum from international to local. ADIA is internationally focused, ADQ is mostly locally focused, and Mubadala sits somewhere in between. But it gets more complicated from there. Smaller funds, special investment vehicles, holding companies, and asset managers. It's all a bit of a blur here in Abu Dhabi.

ADIA

Abu Dhabi Corniche's most imposing skyscraper is the 342-meter headquarters of the Abu Dhabi National Oil Company (ADNOC). But my favorite building isn't as tall, just around 40 floors, yet just as important to Abu Dhabi's future. That Kohn Pedersen Fox-designed tower houses one of the emirate's most secretive organizations: the Abu Dhabi Investment Authority, better known as ADIA.

Founded in 1976, ADIA was the first fund designed to invest the enormous surplus the government generated from oil revenues. It currently controls just over $1 trillion in wealth and has given a 20-year annualized rate of return of 6.3% (as of 2024). ADIA invests exclusively outside the UAE (following the Santiago Principles) and has a reputation for being conservative. They have to be as ADIA is kind of the anchor of the whole emirate.

ADIA is notoriously secretive, but as far as I can tell, the best way to understand its investment strategy is to think of it in three buckets.

First, the traditional/fundamental bucket: ADIA manages most of its money internally now (increasing their in-house management to 64% up from 55% in 2022), with teams focusing on each asset class—private equity, real estate, and maybe even a bit of stock picking.

Secondly, the "scientific" or quantitative bucket: ADIA has been aggressively expanding their quant research and development (QRD) team with high-profile hires like Marcos López de Prado, who spearheaded usage of ML in the financial sector, formerly of Citadel and AQR, and now serves as the Global Head of Quantitative Research. ADIA’s QRD strategy was apparently inspired by the Manhattan Project and Bell Labs, putting people who are best in their specific niches all in the same room and see what happens. Think of it as their own supercharged internal Citadel Securities or D.E. Shaw.

Third, the external manager bucket: ADIA allocates to external managers for niches where they lack in-house expertise, including investments in hedge funds through their Financial Alternatives division.

Although ADIA was the first, it's joined by two counterparts ADQ, the new and shiny entrant, and Mubadala, which remains as active as ever.

Mubadala

Mubadala is focused on nation-building, innovation and diversification. It became the world's most active sovereign investor in 2024, deploying around $30 billion across 52 deals. Managing around $330 billion, the fund achieved a 10.1% five-year rolling return and an 8.7% ten-year return, significantly outpacing ADIA's conservative approach.

I think it’s interesting to note that 57% of capital deployment in 2024 was towards the United States and 85% went to developed economies. The fund seems to believe that US innovation in sectors like AI, tech, and healthcare can be a big strategic advantage. The fund also holds controlling stakes in GlobalFoundries, the world's third-largest chip foundry and operates Hub71, a tech accelerator designed to boost the attractiveness of Abu Dhabi for startups.

Mubadala has many funds nested inside it. Mubadala Capital runs a $430 billion alternative asset platform (and has done some very impressive venture deals with fast-growing companies like Brex and Alloy Therapeutics). The Abu Dhabi Investment Council was spun off from ADIA (including all the local entities that it had stakes in like ADCB) and later merged with Mubadala. And then there's MGX, but more on that later.

ADQ

ADQ is kind of an everything-local fund. Established in 2018, it's the youngest of the three sovereign pillars. But it's grown fast, doubling assets to $251 billion in just four years. Anything crucial to Abu Dhabi's infrastructure and supply chain tends to end up here. Important public services and government sectors like power (TAQA), ports (AD Ports), media (twofour54), transport (AD Airports, Etihad Rail), and even Etihad Airways and the Abu Dhabi Securities Exchange have gradually been folded into ADQ.

ADQ seems to have a strategy of taking a lot of their portfolio companies public and many of its portfolio companies are already listed on ADX.

Even though ADQ is mostly locally focused, they've made some interesting international investments too. The $35 billion Ras Al Hekma deal was Egypt's largest foreign investment ever where ADQ acquired development rights to a 170-square-kilometer Mediterranean coastal zone expected to attract $150 billion of investment in its lifetime. They also took a minority trophy stake in the auction house Sotheby’s.

That covers all three of Abu Dhabi’s sovereign wealth funds. Now let’s talk about their holding companies and other investment vehicles.

International Holding Company (IHC)

This vaguely named holding company has seen rapid growth. From a market cap of roughly $190 million in 2019, IHC has exploded to approximately $238 billion. This has happened mainly by folding companies into it.

IHC now operates over a thousand subsidiaries spanning construction, healthcare, technology, mining, and more. Revenue hit $25.8 billion in 2024, up 54% year-over-year. Understanding IHC is essential because so many other entities nest underneath it. It is also listed on the Abu Dhabi Securities Exchange and is the largest company listed on it by market capitalization.

2PointZero

Launched in January 2024, 2PointZero is IHC's "next-generation holding company," now managing approximately $32 billion following its merger with Multiply Group and Ghitha Holding. The platform houses Chimera Investments and International Resources Holding (which acquired 51% of Zambia's Mopani copper mine for $1.1 billion). Listed on ADX.

Lunate

Lunate is a homegrown alternative asset manager that launched in January 2024 and has already grown to $110 billion in assets under management. Unlike the sovereign wealth funds that deploy government capital, Lunate actively raises third-party institutional capital while maintaining ADQ and Chimera as its anchor investors. Held under 2PointZero.

Lunate recently partnered with American alternative investment asset management company, Blue Owl to invest in mid-size asset managers and launched an AI Data, Power & Infrastructure ETF. Abu Dhabi seems to want to attract global capital with Lunate, not just spend their own.

Alterra

Managed by Lunate, Alterra is the world's largest private climate investment fund. It launched at COP28 and operates as a fund of funds with the $6.5 billion provided to BlackRock, Brookfield, and TPG. It has an initial UAE commitment of $30 billion and targets $250 billion in climate investments by 2030.

Axight

Established under Lunate in March 2025, Axight is a dedicated Asia-Pacific private equity vehicle.

Alpha Dhabi

Held under IHC with a market cap of around $28 billion, Alpha Dhabi controls Abu Dhabi’s most well-known real estate developer Aldar Properties and the “longevity”-focused healthcare network PureHealth among more than 250 businesses. Also listed on the ADX.

L’imad

L'imad is the newest holding company and is interestingly owned 100% by the Government of Abu Dhabi. 84.76% of Modon Holding shares were sold to L’imad from IHC, ADQ, and Alpha Dhabi.

Recently, Abu Dhabi has really focused on privatizing its industries so this move of, in effect, nationalizing Modon is noteworthy.

Modon's real estate and hospitality portfolio (valued at approximately $15 billion) includes key Abu Dhabi developments and projects like Reem, Saadiyat, and Hudayriyat Island. Plus international ones in Ras El Hekma in Egypt, and La Zagaleta in Spain.

L’imad was also Abu Dhabi’s chosen investment vehicle that bid alongside Saudi Arabia's PIF, Qatar Investment Authority, and Jared Kushner's Affinity Partners for Warner Bros. as part of a hostile bid led by Paramount-Skydance (Netflix seems to have ultimately won out).

MGX

MGX is Abu Dhabi's new vehicle for AI-based investments. It’s set up as a joint venture between Mubadala and AI company G42.

MGX targets $100 billion in assets under management focused exclusively on artificial intelligence.

MGX has acted as a venture capital deployer, funding AI and data-based startups: participating in OpenAI's $6.6 billion funding round, Databricks' $10 billion round, and xAI's $6 billion round.

MGX’s most public deal was the recent US TikTok deal where it got 15% of TikTok’s US operations alongside Oracle and Silver Lake, and was the only non-US/Chinese investor.

One of MGX’s main goals seems to be sovereign capability for AI compute. They’ve taken their largest step so far with Stargate UAE, a 1GW data center cluster built in cooperation with G42, Oracle, NVIDIA, Cisco, and SoftBank.

Stargate UAE is part of OpenAI’s Stargate project, a $500 billion AI infrastructure initiative to build data centers alongside OpenAI, SoftBank, and Oracle. MGX contributed approximately $7 billion to the Stargate Project and Stargate UAE is the first one outside of the US.

MGX is also part of the Global AI Infrastructure Investment Partnership with BlackRock, BlackRock’s Global Infrastructure Partners, Microsoft, NVIDIA, and xAI. They’re the consortium that bought Aligned Data Centers, a Texas-based company that builds data centers.

AI and it's associated infrastructure is Abu Dhabi’s recent big bet.

XRG

XRG is ADNOC’s wholly-owned international investment vehicle launched in 2024 with a focus on lower-carbon energy and chemicals.

Its value has almost doubled within a year of founding with a current value of $151 billion, according to ADNOC.

XRG seems to be a strategic move by ADNOC to carve out its international activities into a standalone entity with an exclusive international focus. And we can see this in action from ADNOC moving its American assets to XRG.

XRG has a focus on natural gas and has acquired rights and shares for it in the US, Africa, and the Mediterranean. XRG also completed ADNOC's largest-ever acquisition, the German specialty chemicals company Covestro for €14 billion, acquiring stakes in its US-based hydrogen and LNG projects. XRG seems to also want to test the waters in AI and was part of an agreement along with ADNOC, Masdar, and Microsoft to deploy artificial intelligence agents for internal uses at ADNOC.

Many More

There are many more entities doing targeted investments regarding Abu Dhabi's national interest. Like the Emirates Investment Authority (EIA) which acts as the UAE's federal sovereign fund and the Tawazun Economic Council and its EDGE Group subsidiary which handles defense acquisitions.

And then there are the family offices and private funds that function on an if-you-know-you-know basis.

Why It Matters

Abu Dhabi's capital has become a tool for its diplomacy and statecraft. The days when most of the money was parked in external money managers are long gone. Now its investments in Egypt stabilizing their economy (and backing Egypt’s request for a loan from the International Monetary Fund), TikTok stakes preserving US market access, participating in American AI infrastructure build-outs with Stargate to align the emirate with American AI ambitions, all to advance Abu Dhabi's strategic interests that we talked about at the beginning.