Press Releases

AI to Revolutionize Investment Strategies, Mubadala and MGX Report

  • 93% of investment funds anticipate AI-driven value within three years
  • Early adopters of AI are gaining a competitive edge, leveraging groundbreaking applications in portfolio management and deal-making
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  • 93% of investment funds anticipate AI-driven value within three years
  • Early adopters of AI are gaining a competitive edge, leveraging groundbreaking applications in portfolio management and deal-making

 

Davos, January 22, 2025 – KELIX bio,Artificial Intelligence (AI) is set to revolutionize the investment industry within the next three to five years, delivering groundbreaking applications across the investment lifecycle and portfolio management, according to a new report commissioned by Mubadala Investment Company and Abu Dhabi’s AI and advanced technology investor MGX.

The whitepaper, titled Alpha Intelligence: The Investment Fund of the Future and developed with research contributions by Bain & Company was launched at the World Economic Forum Annual Meeting in Davos. It explores how investment funds are leveraging AI to drive alpha, improve operational efficiency, and redefine portfolio value creation.

Based on a 2024 Bain & Company survey of private equity firms representing over $3.2 trillion in assets under management, the report states that 93% of respondents anticipate moderate to substantial benefits from incorporating AI into their processes within three years, although just 2 % are expecting substantial returns this year.

Current AI usage in the industry remains in the augmentation phase and focused on enhancing existing processes rather than replacing them. However, the pace of AI adoption is accelerating, by deploying AI to automate deal-making, optimize portfolio management, and enhance decision-making processes.

Khaldoon Khalifa Al Mubarak, Managing Director and Group CEO at Mubadala said: “Investors who embrace AI now will be best positioned to thrive in the heightened competitive landscape ahead. Early adopters are already gaining a competitive edge; this study shows that AI-enabled funds are pulling away from the pack by integrating cutting-edge tools that deliver measurable value both operationally and at the portfolio level.”

Ahmed Yahia, Managing Director and CEO of MGX said: “More than any other technology in human history, AI will be pervasive across all aspects of our lives. It will enable greater and faster learning, innovation, technology breakthroughs, cheaper and faster production systems, unparalleled delivery of services. It will enable unprecedented prosperity. As an AI native investment company, we are leveraging AI in everything we do. Fusion with AI starts in MGX.”

Within three-to-five years, funds expect AI to unlock transformative capabilities, including real-time portfolio adjustments and unprecedented efficiencies in sourcing, diligence, and exit strategies.

AI: the competitive edge in a rapidly evolving landscape

Funds adopting AI, particularly those with robust data science infrastructures, are outperforming their peers by integrating AI across the investment lifecycle. Limited Partners are increasingly favoring General Partners that demonstrate AI maturity, creating a virtuous cycle to attract more capital and talent

Some funds now have AI teams of 40–70 specialists who develop proprietary tools, integrate third-party applications, and help portfolio companies deploy AI solutions. Advanced investors have been building these capabilities for over a decade, giving them a head start in the competitive AI landscape.

The 2024 Bain & Company survey also found that 18% of portfolio companies are already seeing significant concrete value from operational AI use cases, such as improving customer onboarding and support. One fund reported over $150 million in annual positive bottom-line impact by working closely with PortCos on AI-powered operational improvements.

 

Abu Dhabi’s development as an AI-investing hub

Mubadala’s commitment to AI is grounded in nearly two decades of investment in the technologies that have become the ecosystem for today’s advancements, including semiconductor manufacturing, data centers and renewable energy. These investments support Mubadala’s determination to shape the industries of the future in a way that delivers sustainable, long-term value to stakeholders.

The whitepaper highlights how Mubadala is leveraging AI in its operations to enhance decision-making, optimize resource allocation, and streamline operational workflows. Mubadala’s AI strategy is structured around three pillars - Invest Better, Work Smarter, and Accelerate Impact - reshaping investment practices to deliver superior outcomes.

MGX is integrating AI at every stage of the investment process. From sourcing and due diligence to portfolio management, MGX is pioneering an AI-native approach to investing that serves as a blueprint for the industry.

MGX is leveraging AI in everything it does - business underwriting, value creation plans design and implementation, talent sourcing and management. It augments the capability to support business builders quite dramatically.

The future of AI in investing

The report emphasizes that successful AI adoption requires collaboration across a broader ecosystem of regulators, academia, startups, and technology leaders. This approach is exemplified by the UAE’s commitment to becoming a global leader in AI, as demonstrated by its fifth-place ranking in Stanford University’s Global AI Vibrancy Tool.

To read the full report, visit: Alpha Intelligence - The Investment Fund of the Future

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