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Mubadala's $1.1bn investment could lead to wider UK-UAE trade deal.

Together with the UK Office for Investment, Mubadala has launched the UAE-UK Sovereign Investment Partnership, with an initial £1bn investment commitment to life sciences industries. The Partnership will develop a future-focused investment relationship promoting growth & innovation.


Experts say funding commitment is likely to 'build into a crescendo' in the form of a post-Brexit UAE-UK bilateral trade deal.


Abu Dhabi’s move to invest £800 million ($1.1 billion) into the next generation of British life science companies has been mooted by experts as a lead-in to wider UK-UAE post-Brexit trade deal.


The UK Office for Investment (OfI) and Abu Dhabi’s Mubadala Investment Company on Wednesday signed a long-term investment agreement.


The UAE-UK Sovereign Investment Partnership (SIP) will serve as a coordinated investment framework to grow a future-focused relationship between the two nations, driving economic recovery, jobs and growth.


An initial £800m commitment from Mubadala to invest in UK life sciences over five years is the first focus for the SIP. The sum will be deployed alongside the UK’s £200m Life Sciences Investment Programme announced last year, a pool of patient capital for the sector that will enable more UK life sciences businesses to scale and grow.


This is the first agreement of its kind for the UK and the Office for Investment and will deepen existing UK-UAE trade and investment ties that were worth £32 billion in 2019.


New UK-UAE Brexit deal?

According to Wes Schwalje, COO of Dubai-based research firm Tahseen Consulting, the UAE-UK funding commitment is likely to “build into a crescendo” in the form of a newly-inked post-Brexit UAE-UK bilateral trade deal that Arabian Business understands is being discussed at inter-government level.


“It’s a very strong commitment by both parties to build the trade and investment relationship to speed the post-pandemic economic recovery and create jobs and growth,” said Schwalje.


The expert predicted that the new life-sciences deal could get the UK-UAE Brexit agreement “over the finish line”.


“The UAE has seen how powerful a world-class innovation and R&D ecosystem can be in the age of vaccine diplomacy,” said Schwalje, referring to Oxford University’s patenting of the world-first AstraZeneca Covid-19 vaccine.


“It will be very important for the UAE, which is contributing more than 80 percent of the fund, to determine how it will leverage the cutting-edge technologies and research that flow from the UAE-UK Sovereign Investment Partnership to catalyse its own domestic life-sciences innovation and R&D ecosystems,” said Schwalje, adding that mutual areas of interest could include composite manufacturing, cellular agriculture, agritech, semiconductors, renewable energy, biotech and health tech.


Post-Brexit freedom to trade

John R Bryson, professor of enterprise and economic geography at the University of Birmingham in the UK, commented that the Brexit deal has “opened up” the relationship between Britain and the non-European world.


“European Union (EU) membership tends to come with a very inward-looking perspective on the world economy,” Bryson said. "This is unfortunate because global problems require global solutions."


The professor lauds the benefits the deal will lend British life science companies as they try to develop new innovative health solutions.


“These solutions benefit humanity, but also provide important commercial opportunities,” he said. “On the other hand, the agreement benefits the UAE as life sciences are a key growth area. There will be many important opportunities to capture revenue streams that will contribute to supporting the diversification of the UAE economy."


'Much needed' UK investment

The SIP fund is set to provide “much needed stable investment” into the next generation of British life science companies, said a statement from the UK government.


The industry, which generates £80 billion turnover a year within the UK and employs more than 250,000 people, is expected to benefit from stronger links in life sciences research, education and closer ties between the UAE and UK.


Over a five-year period, the SIP will invest across several tech and innovation-led sectors such as energy transition and infrastructure that will support job creation in both nations, strengthen national research and development capabilities and develop new areas of investment collaboration, the UK government said.


Khaldoon Khalifa Al Mubarak, managing director and group CEO of Abu Dhabi-owned SWF Mubadala, said: “The UAE and UK are aligned on the importance of global action on critical priorities such as healthcare innovation and delivery, climate change and the sustainable growth of high-skilled industries.”


Al Mubarak added that coordination on investment and global innovation ecosystems is “vital” to enabling progress and presents a significant post-Covid economic opportunity for the UK and UAE.


UK International Trade Secretary Liz Truss said: “The UAE is an important trading partner for the UK and home to some of the world’s largest and most experienced investment companies.


"It’s fantastic that we are collaborating more closely in the industries of tomorrow like science, tech and green growth, so we can build back better and deliver an investment-led, jobs-led recovery from coronavirus.”


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