Marc Antaki, Head of Portfolio Strategy, Mubadala, on navigating current uncertainties by focusing on the future

Marc Antaki, Head of Portfolio Strategy, Mubadala

As business leaders and global investors navigate an increasingly complex landscape, never has it been more important to maintain a long-term perspective and understand megatrends; the powerful and large-scale structural shifts that are shaping our world.

Difficult financial conditions, recessionary pressures, supply chain disruptions, energy and food security concerns, and a host of other issues are challenging business leaders like never before. They must look beyond the day-to-day and focus on the future transformative changes that will have the biggest impact on the way we live, work, and invest.

For long-term investors like Mubadala, understanding megatrends can help identify growth opportunities, mitigate risk, and capitalize on emerging trends that have the potential to disrupt traditional industries and create new ones. We adopt a forward-leaning investment strategy and allocate capital in line with our long-term views on megatrends, to shape our portfolio and generate long-term sustainable performance while delivering positive impact to current and future generations.

As part of Mubadala’s periodic strategy review, we regularly test our convictions about the trends we see to ensure that we stay ahead of the curve. This year, to help better understand market perceptions from East to West and across generations, we commissioned a research study with Bloomberg Media. The study gathered and compared opinions from 1,800 people from the West (United States, United Kingdom, France) and the East (India and China), as well as the UAE. In those countries we looked at three distinct groups – seasoned investors, engaged and informed Millennials, and members of Generation Z who represent the latest and largest cohort as workers and consumers. We looked specifically into five megatrends that are affecting economic, social and environmental outcomes – namely climate change, big demographic shifts especially aging societies and generational shifts, digital and disruptive technologies, urbanization and inequality.

According to the findings, climate change represents the greatest risk to the well-being of the world, outstripping all others. It impacts health, degrades the environment and harms business performance, underlining the case for greater levels of investment in the energy transition to low-carbon economies. Our study shows the climate is also seen by all groups polled as the biggest opportunity for companies to change the world for the better.

Mubadala invested early in the energy transition, for example, establishing Masdar in 2006 which has grown to become one of the world’s most prominent renewable energy companies. Masdar now operates in over 40 countries developing, commercialising and deploying renewable energy solutions, with a goal to provide 100GW of renewable power by 2030.

Digital technologies were rated by survey respondents as the megatrend that will have the most relevance to investors and businesses. Across the world, technology acts as an enabler, supporting people, businesses and society to develop solutions to tackle environmental concerns and help eradicate food scarcity, poor sanitation, lack of access to education, poverty and other health and social issues.

Mubadala invests heavily in breakthrough technological innovation including semi-conductors, Artificial Intelligence, advanced mobility and autonomous driving, and increasing digitalization across sectors. The same also applies to our work with Hub71, which is supporting Abu Dhabi in positioning itself as a global hub for startups and innovation, including in climate tech, fintech and healthtech, to name a few.

Across age groups there was concern about demographic shifts impacting the quality of life, the talent pool, poverty levels and public-sector spending. But investors see demographic shifts as the most important of the megatrends to their business today. Ageing societies are producing challenges for some countries, and helping to drive new business opportunities and ways of working.

Mubadala leverages the demographics trend by investing in health, with a focus on wellness and longevity, as well as new ways of living and changing patterns of consumption with a focus on experiences, sustainability and tech-compatibility. In healthcare, Mubadala has supported Abu Dhabi in developing a robust, world-class healthcare sector with the creation of Cleveland Clinic Abu Dhabi, as well as a broader network of world-class healthcare facilities that provide a wide range of services across more than 60 medical specializations. This has helped to address the specialist healthcare needs of Abu Dhabi and the UAE, reducing the need for people to travel abroad for treatment.

Overall, our study reinforced the belief that companies that factor megatrends into their business strategies typically benefit from improved overall performance. Indeed, respondents expect businesses to play a big role in responding to megatrends. India and the UAE feel this most strongly at 95 percent and 91 percent respectively, followed by the US where the number was 85 percent.

Mubadala invests in megatrends by identifying investment opportunities that align with our long-term investment approach and our focus on generating sustainable returns over time. We continue to deploy capital locally and internationally with best-in-class partners who shares similar beliefs and convictions and with whom we can help accelerate growth and create a positive impact for current and future generations. Here in the UAE, at the centre between East and West, we embrace partnering with link-minded leaders to foster collaboration and help to find pragmatic solutions to tackle some of the world most pressing challenges.