beyondbrics

The transformation of Aabar Investments has been swift and spectacular.

It started life in 2005 as a small energy company, but over the past two years it sold its core oil and gas assets, was taken over by a government investment vehicle and has emerged as one of the more active of Abu Dhabi’s diverse stable of investment funds – notably hitting the headlines last year when it splashed out €1.95bn for a 9.1 per cent stake in Daimler.

Now it looks set to be heading for another transformational shift, with the announcement that its board plans to meet on Thursday to discuss the possibility of de-listing from the Abu Dhabi Securities Exchange.
As one shareholder told your correspondent it may offer some relief for those who bought into the original energy story only to see the company turn into an altogether different beast and watch as its share price has plummeted.

He believes the possible de-listing would make sense for both the government and shareholders, if the terms offered to minority investors are decent.

Since the beginning of the year Aabar’s share price has fallen from around Dh2.08 to Dh1.6. For the International Petroleum Investment Company (IPIC), the government vehicle that owns around 70 per cent of Aabar, de-listing would enable it to use the company to continue diversifying its portfolio without worrying about shareholders and the financial disclosures that go with a listing.

IPIC has pumped billions of dollars into Aabar since taking control the company, helping fund Aabar’s shopping spree which has also seen it snap up AIG’s Swiss private bank and acquire a stake in Sir Richard Branson’s space venture, Virgin Galactic.

To some, Aabar’s diverse spending has raised questions about its strategy and the coordination between Abu Dhabi’s numerous investment vehicles. It has also highlighted the ambitions of Sheikh Mansour bin Zayed al-Nahyan, a highly influential member of Abu Dhabi’s ruling family and the chairman of IPIC, which for decades kept a low profile passively investing in energy related assets.

It was Sheikh Mansour who created waves in the football world with the acquisition of Manchester City, a deal he followed up with by making a hefty profit on a $3.5bn stake in Barclays – with IPIC used as the vehicle to make the investment in the British bank.

Compared to its activities of 2009, Aabar, which has assets of around $10bn, has been relatively quiet this year as have other funds within the Abu Dhabi stable. But it would be a mistake to bet against it hitting the headlines again. And a de-listing would simply confirm its transformation into the state investment vehicle it has clearly become.