The Daily Circuit: MGX invests $2B in Binance + PIF acquires Niantic

👋 Hello from the Middle East!

In the Daily Circuit today, we’re looking at PIF-owned Scopely’s $3.5 billion acquisition of gaming giant Niantic Labs, turnaround plans for Abu Dhabi-acquired sports car maker McLaren, the Muscat trading debut of Oman’s Asyad Shipping and the Armani-branded homes to be built in historic Diriyah on the outskirts of Riyadh. But first, MGX’s $2 billion crypto bet.

Having set leadership in the emerging realm of digital assets as a national goal, the UAE is extending its embrace of Binance, the world’s biggest crypto exchange.

MGX, the tech investment fund created by Abu Dhabi’s Mubadala sovereign wealth fund and G42 artificial intelligence firm, announced on Wednesday that it has invested $2 billion in the company, which was founded in China and has about 1,000 employees working in Dubai.

When Binance founder Changpeng Zhao, known as CZ, pleaded guilty to U.S. money laundering charges last year and spent several months in prison, he was replaced as CEO by Richard Teng, previously head of Abu Dhabi’s Financial Services Authority.

“MGX’s investment in Binance reflects our commitment to advancing blockchain’s transformative potential for digital finance,” Ahmed Yahia, Managing Director and CEO of MGX, said in a statement.

MGX, which was established a year ago, has also invested in OpenAI and Elon Musk’s xAI. The firm is chaired by Sheikh Tahnoon bin Zayed, the UAE’s national security adviser, who is also Chairman of Abu Dhabi sovereign wealth funds ADQ and ADIA.

The Dubai Financial Services Authority, meanwhile, announced that San Francisco-based crypto payments developer Ripple Labs received regulatory approval to operate in the emirate.

“As the Middle East, Africa and South Asia’s leading global financial center, DIFC is proud to support forward-thinking companies like Ripple as they shape the future of finance and accelerate the adoption of blockchain technology in the payments industry,” DIFC Authority CEO Arif Amiri said.

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SEIZE THE DAY

Rival consulting firms are jumping to fill the gap created by the Saudi Public Investment Fund’s decision to suspend work with PwC for a year. Managers at Deloitte and Ernst & Young have instructed staffers to prepare for more work in the kingdom, while some firms have been invited to bid for contracts tied to the kingdom’s most prestigious projects, such as Neom and AlUla, Bloomberg reports. While the Saudi sovereign wealth fund decision bars hiring PwC for advisory work, it allows the London-based firm to still compete for auditing contracts, according to the news agency. The billions spent on Saudi Arabia’s megaprojects have been a boon for international consulting firms amid an industry slump in other parts of the world.

📷 Photo of the Day

Abu Dhabi’s CYVN Holdings to merge McLaren with EV maker

After taking control of McLaren Automotive last year, Abu Dhabi’s state-owned CYVN Holdings is starting to roll out its turnaround plans for the venerable British sports car maker.

The investment company, a unit of the ADIA sovereign wealth fund, is preparing to merge McLaren with its London-based electric-vehicle startup Forseven Holdings, Bloomberg reports.

At that point, the combined company will start producing high-end sport utility vehicles and sedans, following a blueprint that has been successful for Ferrari, Lamborghini and Porsche, the news agency said.

CYVN plans to announce the move in the coming weeks, with former Jaguar Land Rover executive Nick Collins in charge of the merged automaker.

The Daily Circuit: ADQ launches pharma firm + Eid holiday getaways

👋 Hello from the Middle East!

Today in The Daily Circuit, we’re looking at new progress for non-oil growth in the Gulf, a profusion of mangroves in Abu Dhabi, why Mumtalakat may sell a stake in McLaren and SVC’s fireside chat with General Atlantic’s Bill Ford. But first, another big life sciences play out of the UAE.

ADQ has launched a new healthcare holding company named Arcera that consolidates the Abu Dhabi sovereign wealth fund’s pharmaceutical interests in Switzerland, Turkey and Egypt, making it one of the MENA region’s largest life sciences businesses. The new company, based in Abu Dhabi, intends to double its revenue over the next five years through international acquisitions and partnerships, ADQ said in a statement on Monday. 

Arcera’s portfolio will consist of 2,000 branded medicines, addressing illnesses in the areas of neurology, gastroenterology, cardiovascular, pain relief, rheumatology and infection. The holding company owns ADQ’s stakes in Switzerland’s Acino International, Turkey’s Birgi Mefar Group and Egypt’s Amoun Pharmaceutical Co.

Abu Dhabi has taken a forward-leaning stance on healthcare investments coming out of the Covid-19 pandemic and today aims to become a regional hub for life sciences — one of the hottest areas of investment that covers everything from genomics and pharmaceuticals to clinical trials and personalized medicine. ADQ, chaired by UAE National Security Advisor Sheikh Tahnoon bin Zayed, is spearheading a number of those efforts under its mandate to be the lead investor driving the UAE’s economic transformation from petro-state to a knowledge-based economy.

The formation of Arcera follows a familiar playbook: In January 2022 ADQ merged its healthcare subsidiaries with Alpha Dhabi’s Pure Health Medical Supplies to create PureHealth, the country’s largest healthcare provider. ADQ is planning to list the new entity, Bloomberg reports, as it did with Purehealth last December. The firm’s $1 billion listing surged 84% on its debut. 

NON-OIL OUTLOOK

Non-oil economic growth appears strong in the Middle East amid diversification efforts by Saudi Arabia, the UAE and other states, helped by government support and reforms to attract private capital, according to the latest PwC Middle East Economy Watch. Oil prices are expected to drop this year amid supply and demand growth uncertainty. “Strong growth in the non-oil sector is expected to counterbalance these impacts,” said Richard Boxshall, Partner and Chief Economist, PwC Middle East. Inflation cooled in the GCC last year, with PwC composite data for the region averaging 2.6% and ending the year at 1.7% YoY, down from a post-Covid high of 4.3% in July 2022.

PROJECT MANGROVE

Abu Dhabi has planted 850,000 mangrove trees along the emirate’s coastal areas as part of its Ghars Al Emarat initiative to mark last year’s COP28 climate summit. The project committed to planting 10 mangroves for each of the 85,000 visitors to the two-week United Nations conference in December that took place at the Expo City Dubai. Mangroves are hardy shrub-like trees that form dense thickets and adapt to growing in coastal saline waters. They are a popular tourist attraction in Abu Dhabi, where kayaks, canoes and paddle boats are available for rental to let visitors explore mangrove wetlands that have become habitats for flamingos, crabs and turtles.

Abu Dhabi Investment Authority: The sovereign wealth fund and India’s Kotak Alternative Investment Fund agreed to invest $240 million in Indian real estate group Prestige.

The Sovereign Fund of Egypt: The fund agreed to buy control of the company that owns Egypt’s Misr Pharmacies chain and expects to complete the deal by the third quarter, Daily News Egypt reports.

Mumtalakat: CYVN Holdings, an investment firm backed by Abu Dhabi, may buy a stake in British luxury carmaker McLaren, as part of a group led by Bahrain’s Mumtalakat sovereign wealth fund, Bloomberg reports.