Our strategy is derived from the mandate given to ICD in its governing law:
- Consolidate and manage the existing portfolio of companies and investments of the Government of Dubai;
- Provide strategic oversight of the portfolio in order to preserve wealth and grow value sustainably; and
- Efficiently deploy and recycle capital by making new investments, either locally, if commercially sound and strategically aligned with ICD’s mandate, or internationally, to enhance returns and diversification.
Significant progress was made with regards to the first part of this mandate in the early years of ICD’s life. The composition of the core portfolio has remained relatively stable, whilst achieving growth and performing well over the cycle.
For some time now, our focus has been directed towards portfolio management and capital deployment, both critical to the successful implementation of the second limb of the mandate.
In recent years, as a natural evolution of the strategy, we have increasingly emphasised capital deployment in diversifying markets and asset classes to enhance the long-term risk-adjusted return potential of ICD’s investment portfolio.
As an institution with a mission to create wealth and long-term value, whilst also focusing on sustainability, we have adopted several guiding principles designed to inform our investment process.
- Emphasis should be placed on capital preservation, adjusted for inflation;
- Capital allocation decisions should be the result of disciplined and thorough evaluation;
- Decisions to invest, manage and exit investments should be made on commercial principles;
- Investments should demonstrably provide either strategic or diversification benefits, and contribute to risk-adjusted returns and overall portfolio construction objectives; and
- Performance should be monitored and assessed regularly, through ongoing oversight and appropriate level of engagement.
As reflected in our core values, we are committed to following ethical practices in everything we do and we aspire to be a trusted partner to our portfolio companies, external managers, and other stakeholders.
Our approach to asset allocation and investment selection is underpinned by the following features:
- Strong visibility of short and long-term cash flows and funding requirements to support robust capital budgeting, giving consideration to existing commitments, the effective build-out of long-term investment themes, and well-timed capital recycling;
- Clear framework for capital allocation across asset classes and sectors internationally;
- Willingness to partner with external managers to secure the best access to high-quality investments globally; and
- Continuous review and calibration of market dynamics and industry trends to form forward-looking views on asset classes and sector attractiveness, encourage the development of new investable hypotheses, and shape our approach on possible allocation.
Taking these features into consideration, asset allocation is determined by balancing commitments to strategic initiatives, support of portfolio companies, capital recycling events, and new investments in target verticals. Whilst investments in Dubai have historically favoured a significant degree of influence and active engagement, our approach to international investments leverages the expertise of highly credentialed external managers offering access to our target asset classes, sectors and geographic markets.
We aim to strike a balance between strong conviction in our investment decisions based on sector knowledge and deep due diligence, and diversification of our exposure and reliance on external managers.
When evaluating new investments or commitments, we place significant emphasis on corporate values and governance, and we look for companies and asset managers with best-in-class structures and processes. Where we have significant influence, we encourage sound governance, effective decision making and strong execution. When we are a minority investor, we remain actively engaged with our partners and aim to be a reliable, responsive, and trusted investment partner.