tv The David Rubenstein Show Peer to Peer Conversations Bloomberg July 3, 2018 2:00pm-2:30pm EDT
david: let me ask you about the country you are from. khaldoon: the uae is a federation of seven emirates. abu dhabi being the largest. the oil and gas is is finite. we have to prepare herself for the future. david: you lead a group that bought a team in the premier league. khaldoon: manchester has been the most successful club. david: do you ever go down and say let me kick some footballs? >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright.
david: i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? let's talk about something you are passionately interested in, which is football. you lead a group that ought a team in the premier league and in england called manchester city, which won the premier league. khaldoon: football is a passion of mine. i enjoy football. doing that job was an absolute joy. 10 years ago, we started this journey. manchester city was a modest club in terms of their standing within the premier league. they had revenues of $80 million. they had revenues of $80 million. 10 years on, we have pushed the revenue to $550 million. the group is successful financially, economically, but
more importantly in the business of sports successful on the pitch. over the last seven years, it took us three years to build the capability and the club to be competitive. in the last seven years, it has been the most successful club in the premier league. we won the premier league three times in seven years. david: do you go into the locker room and get them speeches come and give them speeches, or how do you inspire the troops? khaldoon: by making sure we have the right organization in place. that is what i am good at, getting the right ecosystem for success on the pitch, getting the right players. that is what wins in sports. it is a complete package. david: when they are practicing, do you ever go down to the field and say let me kick a couple of balls with you? khaldoon: no, in order not to embarrass myself.
david: what other teams do you have around the world? khaldoon: we started with manchester. then we came up with this idea that football is a growing sport everywhere. how about we create a brand, our scouting system, management systems, and use these synergies to be successful in multiple jurisdictions, never been done before. it was a thesis. we did not know if it would work or not. of the last six to eight years, we built the city football group that owns controlling stakes or management stakes in clubs all around the world. we are seeing benefits of that by having a better proposition for sponsors who want access to not just one market, but a global market and want to have that local presence through the football network we have in these clubs. we are looking at india, china, which is a reflection of everything else i am doing. if you look at our portfolio at mubadala, it follows a similar path. as a global platform, our presence in all these markets come and that is how we have grown.
david: let me ask you about the country you are from. i should disclose you and i have done investments together. you have invested in my firm. i've gotten to know you over time. i wanted to ask you about abu dhabi. khaldoon: the uae is a federation. david: the united arab emirates. khaldoon: it is a federation of seven emirates, seven states. abu dhabi is the largest. it dubai being the most famous. the federation was formed in 1971. the father of the nation passed away several years ago, but he established the federation. we have a population of 10 million overall. we have a wealth of resources, particularly the oil and gas field that has been the foundation of the economic development. the oil and gas is finite, and we have to prepare herself for the future. the leadership is focused on maximizing benefits and returns from this resource, but at the same time build a diversification strategy for the future. that's what you have in the uae today.
david: your economy is dependent on oil, 50%, 70%. khaldoon: oil represented 70% to 80% of the gdp. we have been able to move the economy where the concentration is less than 35%. we are still a long way away, and the focus is to push that number down as much as possible. david: why do you think dubai is better known in some parts of the world? khaldoon: we have a radius around us, india, egypt, countries with immense history. we are new into this market. we don't have a taj mahal, and we don't have the pyramids, but what we have been able to do is build a tourism infrastructure, hotels, shopping, restaurants, entertainment, taking advantage of what we have, a sea and the desert. by doing so, we have been able to build an influx of tourists that supersedes egypt and india combined.
david: let's talk about how you got to where you are. you grew up in abu dhabi, is that right? yes. david: you are not a member of the royal family. that means you are part of the family that helped found the country. the royal family in abu dhabi has hundreds of members? khaldoon: yes. david: you are not a member of the royal family. khaldoon: my grandfather was essentially the first chief justice in the uae when the federation was established. my father was an ambassador. so i come from a family that has justice, diplomacy. after my father passed away, i was brought up by my grandfather at a young age.
david: your father passed away because of something tragic. khaldoon: yes, he was assassinated in france while he was ambassador there. david: how old were you? khaldoon: i was six years old. david: you are living in abu dhabi when this occurs. you later go to college in the united states. how did you happen to pick tops university? khaldoon: i think i had been to the united states once. i had never been to boston. i went west coast the summer i graduated. that was the first time i went to the west coast. it was then that i realized i was deeply tricked by friends and colleagues who convinced me to go to boston. i love boston, but the weather. from a kid coming out of abu dhabi where temperatures in the summer are north of 100 degrees to end up in boston, that was a tough, tough transition for me. i didn't know california.
when i went to california after i graduated, i was like, darn, i should have started in california. david: did people say where is abu dhabi? your student friends? khaldoon: nobody had any idea about abu dhabi, the uae. second, the pronunciation of my name, i had a difficult name. the pronunciation in english is challenged by most friends in the united states, so i struggled with my name because people could not pronounce it. i became known as khaldoon. it is my american name. david: but you pronounce it another way. you can do that in yiddish, but not so much in arabic. khaldoon: i found that out.
david: you come back after college and you are looking for a job, and what did you do after college? khaldoon: back then you go back to abu dhabi and you are a u.s. gradua graduate. you are going to have essentially two options. you can work in oil and gas or the investment field. i interviewed for both and had an offer for both. i decided to start at the national oil company. i worked there for a couple of years, spent a lot of time in abu dhabi, but also japan. not many people know that, but
abu dhabi is one of the largest you producers of crude oil in the world, and our largest market is japan. that was very interesting for me. i learned a lot from that experience. from there on i moved into the investment world, started at a pipeline project, the first gas project that connects three countries in the middle east. it needed a company to own it, so the government established the company, and the company was mubadala. mubadala started with the project and evolved to what it is today. david: so you were asked to run mubadala, and mubadala today has assets of about $220 billion, so you have grown it from a relatively modest company. khaldoon: over the last three years, we have been defaulting -- we have been evolving and expanding in different directions. less than 2% of our portfolio was in china, india, south america.
we had no presence in these countries, no exposure. over the last three years, we have been actively investing and present in china, actively investing and present in india, south america. we have been opening offices around the world. our operations have reached scale. david: mubadala is owned by the government of abu dhabi? khaldoon: correct. david: who do you report to? khaldoon: i have a board of directors, the board is chaired by the crown prince of abu dhabi, so we have a strong board, very present board. the board meets on a monthly basis. david: he is the crown prince, but day to day, he is in charge of running the operations of the government of abu dhabi, that is fair to say? khaldoon: that is fair to say.
david: is it fair to say you are close to him? khaldoon: i have worked with him for 17 years. david: i guess you are pretty close. when he comes to the united states and meets with the president of the united states, do go with him sometimes? khaldoon: yes. david: have you met president trump? khaldoon: i have had the pleasure and honor to meet with president clinton, president bush, president obama, and now president trump. david: you do this and other parts of the world as well. khaldoon: yes. david: how much of your time is running the day-to-day mubadala operation, and how much related to government issues? khaldoon: the best part of my job is i don't do anything. one of the things i have tried to do throughout my career is surround myself by talented and capable individuals. i have been lucky and hired well. i have a very strong team at mubadala. i have four top-notch ceos that report to me. my ethos professionally has
always hire the best and make sure they have strong, stable of talent around you, and that allows me to do so many things. i have a significant commitment of my time working for his highness, so i travel with him many places around the world. david: would you ever go into government full-time, or are you happy where you are? khaldoon: you know his highness well. you have met him many times. he is a person that i think working for him, it is not a job. it is beyond that. it is beyond that. if he asks me to do anything, i would do it. i am loyal to my country, to my government, but above all working with someone like sheikh mohammed is an absolute joy. i would do anything for him.
david: one of the things the country has decided to do is make more things in the country. why did you decide to have a cleveland clinic in abu dhabi? khaldoon: it is a funny story. about 10 years ago, i was with his highness, sheikh mohammed. it was the month of ramadan. he was visiting a family. he had the breaking of the fast at this family's house. one of the members of that family had just come back from being treated in cleveland. they had just come back. to cut a long story short, after the meal, sheikh mohammed likes to take a walk. many of our meetings are over long walks, which is a challenge when you have to carry documents, and particularly with our weather. when it is very hot some days, believe me, it is one of the hard parts of my job. anyways, we took a walk and
sheikh mohammed turned to me. it was night, maybe 10:00 at night at that point. he said, this gentleman just spent six months in cleveland. we are one of the wealthiest countries in the world. we have a small population. we invested well in terms of infrastructure. why don't we have a hospital with the quality of cleveland clinic here in the uae? it is not acceptable. my people deserve this quality health care, and i want you to handle this project. why don't you go figure out how you can build a cleveland clinic hospital here in abu dhabi. david: so you have that now? khaldoon: he said i don't want any bureaucracy on this. you report directly to me. i want it done now, and i want it done immediately. it took us as an organization about seven years to convince cleveland clinic that we would
commit to the quality of care and to the management to deliver exactly what you have in cleveland in abu dhabi. it took us seven years to build a state-of-the-art hospital, which we have today. that dream he had has been achieved. david: you have opened up a museum. how is that working out? khaldoon: first of all, last time when you came to my office and we met, you made a commitment to visit it. did you do it? david: i did. i was astounded to see some of the art works there. i am an american and i go to abu dhabi and see whistler's mother, so, a great american painted this.
it was in the louvre as part of their collection, and some people say the most expensive work of art ever purchased is in that museum. khaldoon: yes, it will be in that museum soon. david: this was a da vinci purchased a few months ago for $450 million to $500 million. that should be a pretty good attraction? khaldoon: it is a young country, young nation, and we did not have a museum of this magnitude in the uae, and this museum represents many things. yes, it is beautiful. yes, i think the art collection is remarkable, but there is a bigger story. we are trying to push out of the uae a message of tolerance. if you go to that museum, you will see there is a curation. there is one together gallery that for me is incredible, in which you see the world religions and one gallery. you see them next to each other. there is a torah next to a bible
next to a koran from the same period, and multiple iterations where you see these next to each other. phenomenal. you can see that in a museum in germany, the u.k., or u.s., but for a museum in the uae to have that, for people that don't know the middle east, that is a massive step, a massive step and a massive message that you will understand, david, and many will understand the significance of that. david: another thing you have done is bring the formula one races. you built an elaborate formula one course. i have been to the races. is that working out? khaldoon: it is working out great. we have gone from a country that was attracting one million tourists a year to over 20 million tourists a year in a country that has a population of less than 10 million.
we have invested heavily in sporting activities, museums, and hotels, and that has made the uae an attractive place for tourism. you know what is more important than all this? safety and security. in the neighborhood and region we are in, to have a country like the uae to attract that number of tourists it can only be done by having a country that is safe and secure and people feel safe and secure. david: some of the rhetoric out of the u.s. government, has that been a concern in the middle east? about muslims? khaldoon: we don't worry about that. we have such strong links with united states and people here in the united states. we have to be able to tell the difference between rhetoric and reality. ♪
david: in terms of the middle east, sheikh mohammed is very close to the crown prince and saudi arabia. how did they develop this close relationship? khaldoon: you know, the crown you prince of saudi arabia is another incredible leader. what he is doing and what you are seeing in saudi arabia right now is transformational. they share a few of the future, a vision of the future, a better place, not just for their people, but for the region. it is all these factors that make these two special leaders very close. khaldoon: president trump has pulled out of the iranian nuclear agreement. did you support the agreement? khaldoon: it is not a big secret that we in the uae have had reservations over that agreement from the beginning. we live in our region, our neighborhood. we have been dealing with iran
and the challenges that iran puts on the region, the stability and security of the region, has always been a concern. there has been concern over what that agreement has been able to achieve in terms of preventing iran from building a military nuclear capability. david: recently saudi arabia and the uae among others have had a dispute with qatar. what is the basis of the dispute? khaldoon: we live in a challenging region, national security has been at the forefront of all countries that are region faces. the gcc block has always tried to maintain at least a vision of how we see the future, stability, and security of that region. there has been a fundamental shift for disagreement in terms of how we see the future of this region, and the direction they have decided to go with its decisions in terms of its politics, who it has decided to
support, how it is in our view not done what we had hoped it would do with regards to combating terrorism, combating the financing of terrorism, and sharing the vision we have what we feel all of us should have, for the stability of our region. that is at the heart of this dispute. these issues are quite deep, but these issues have been going on now for months. i hope that ultimately this matter gets resolved and i hope at the end of the day that we are all one family. saudis, egyptians, kuwaitis, we are all one people. david: some of the rhetoric out of the u.s. government, has that been a concern to people in the middle east about muslims, or is that political rhetoric and you don't worry about it so much?
khaldoon: no, we don't worry about that. we have such strong links with the united states and people here in the united states, the government, the academic community, the think tanks. across all facets of u.s. society. these links are deep. we have to be able to distinguish between rhetoric and reality, you know, i'm meeting with politicians, businessmen, people from all facets. david: the final question i would like to ask you about, is there anything you would rather be doing than what you are doing now? khaldoon: i love what i'm doing professionally and personally, but if there is one thing i would like to do more than what i'm doing now is in more time with my family. i have three kids, a lovely wife and three children, that unfortunately because of all that i'm doing i don't spend enough time, and that is my one regret.
>> you want to go to technology banking. >> like all. >> a quarter of african-americans at that time? >> very few. >> what compelled you to say i will give all the stuff and start my own company #>> very few were efficiently run. we took kernels at best path. became involved in philanthropy. >> they were part of my family. >> one thing we have to do is ensure that our society is a just society. >> i thought people would not recognize me as my tie was -- this way.