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Abu Dhabi-based artificial intelligence firm G42, backed by a key member of the oil-rich emirate’s ruling family, is setting up a $10 billion fund with a focus on technology investments in emerging markets.
The entity will be formed in partnership with the Abu Dhabi Growth Fund, which was set up by state-controlled ADQ last year. Both G42 and ADQ are part of a business empire overseen by United Arab Emirates national security adviser Sheikh Tahnoon Bin Zayed.
The G42 Expansion Fund will target late-stage growth companies with disruptive technologies. It will operate as a private equity investor, with a significant share of funds earmarked for high-growth regions, in sectors ranging from communications, intelligent mobility and renewables to healthcare.
The move comes as Abu Dhabi -- a city that’s among the few globally to manage over $1 trillion in sovereign wealth capital -- ratchets up efforts to plow oil revenue into the technology sector and diversify its economy. Mubadala Investment Co., an Abu Dhabi wealth fund that owns a minority stake in G42, has itself stepped in to invest in the sector amid a recent rout.
For its part, G42 has been building out its investment team with key hires from Abu Dhabi sovereign funds over the past year. US private equity firm Silver Lake invested in the firm last year and its co-Chief Executive Officer Egon Durban sits on its board. The new fund “is an important milestone in the growth of the UAE’s technology ecosystem,” Durban said in a statement.
Abu Dhabi Growth Fund, a partner in the G42 venture, invests primarily in private equity and venture capital. Led by Khalifa Al Suwaidi -- who was a chief investment officer at ADQ -- the fund has a “unique risk profile that complements the existing Abu Dhabi sovereign wealth funds,” according to its website.
Sheikh Tahnoon, a brother of the UAE’s president, has been at the forefront of many of Abu Dhabi’s recent technology investments. His interests range from Royal Group to ADQ, and both entities recently committed money to a new fund set up by SoftBank Group’s Rajeev Misra.
Read More: One of Biggest-Ever Tech Funds Wins Backing of UAE Royal’s Firm
G42, an AI and cloud computing company, has operations spanning from energy to healthcare and autonomous vehicles. Last year, it formed a joint venture with Beijing-based Sinopharm, marking the first overseas manufacturing of the Chinese coronavirus vaccine.
It was also the first Emirati firm to open an Israel office after the nations normalized ties in the so-called Abraham Accords and rolled out the Middle East’s earliest driverless car trials.
“With the G42 Expansion Fund, we aim to accelerate our global impact not only through the deployment of capital, but also by providing unique access to our networks, management, and operational assets to our portfolio companies,” G42 CEO Peng Xiao said in a statement.
Peng Xiao will be chairman of the new fund’s investment committee, which will also include Abu Dhabi Growth Fund’s Al Suwaidi.
(Updates with details; adds deckheads)
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