Panel, Conference Presentation
Asset Management: Vying for the Competitive Edge | Middle East and Africa Summit 2024
Milken InstituteMichael Piwowar, Todd Boehly, Lawrence Golub, Martin Horne, Camilla Languille, Stephanie Rader, Mike Pivovar
- Sovereign wealth fund assets have doubled over the past decade, while Mubadala aims to expand third-party asset management via Mubatala Capital in Abu Dhabi and establish MGX as the first General Partner to invest at scale in the AI ecosystem.
- Mubadala plans to focus on India's structural tailwinds in healthcare and education driven by a rising middle class, while targeting attractive valuations in China with strategies centered on local demand, supply chains, and strong cash flows, maintaining a small offshore bond presence in Shanghai.
- To support the AI revolution, Mubadala projects data center capacity must grow four to five times over the next 10 years, rising from approximately 70 gigawatts to 300 gigawatts, necessitating an accelerated energy transition.
- Mubadala intends to import global human capital, specifically targeting hundreds of leading AI engineers and technologists to the UAE, alongside building necessary healthcare and education infrastructure to attract this talent.
- Eldridge plans to consolidate Maranon, Stonebriar, and Kane under one brand to reach roughly $70 billion in assets under management, leveraging scale to compete in credit markets while reducing exposure through deep industry knowledge and rapid response capabilities.
- Lawrence expects private equity to adapt to inflation, supply chain issues, and labor market shifts while pursuing strategies in energy transition and artificial intelligence adaptation to remain resilient through concentrated ownership.
- Lawrence anticipates direct lending will grow alongside US private equity, though he expects some backlashes against the sector, particularly in US healthcare services, to continue.
- Goldman Sachs Asset Management plans to explore a MENA fundamental equity strategy, while noting that underbanked SMEs in the Middle East create a supply-demand imbalance for private credit.
- Stephanie notes that while political sentiment may complicate sustainability investments, the economic case for renewables will drive opportunities, with corporates focusing on decarbonizing supply chains to create interest in climate transition lending.
- Martin expects global regulatory changes, including insurance deregulation, to drive a shift toward private assets and notes that business models failing to evolve will become irrelevant within 10 years.
- Martin highlights that investors will navigate the US-China relationship over the long term with oscillating waves rather than short-term reactions, despite expectations that China may grow at a lower level than anticipated due to government reluctance toward excessive growth.
- Lawrence expects investors in China to seek a return of global flows to provide stimulus, while Martin predicts significant investment growth in the Middle East due to its entrepreneurial nature and focus on strategic partnerships.
- Todd expects the US administration to operate with efficiency after a three-year adjustment period, driving innovation through deep capital markets, while anticipating Saudi Arabia will build significant infrastructure for the World Cup and a top-five football league.
- Todd projects the NBA 12-team league in Africa will evolve into franchises requiring facility development, which will be monetized for diverse activities including church rentals.
- Golub Capital plans to expand philanthropic reach to NYU Abu Dhabi via the NYU Impact Investment Fund, aiming for a generational impact through gratitude and student support.
- Mubadala anticipates the Abu Dhabi ecosystem will transform into the "capital of capital" through accumulated scale, partnerships, and know-how, while Eldridge seeks to instill a third-party ethos to achieve business resilience.
- Asset managers are expected to maintain master strategist capabilities to navigate megatrends including geopolitics, AI, energy transition, supply chain restructurings, and private market growth.
- Stephanie expects larger LPs in EMEA to be ahead in adopting sustainability goals, while Martin notes that MassMutual could achieve resilience if it successfully instills a third-party ethos.