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THE IMPORTANCE OF A VISION IN INVESTMENT VENTURES : THE CASE OF IPIC

It is both easy and risky to rely on one asset or competitive advantage in today’s business world. As markets evolve faster and power shifts from parts of the world to others, the key to success relies more and more on adaptation, insight and perception. Gone are the days of Ricardo’s comparative advantage theory, as today what matters most is identifying opportunities of investment that will turn into profits.

IPIC (International Petroleum Investment Company), was created in 1984 and is affiliated to the government of Abu Dhabi.The company was created by the late H.H. Sheikh Zayed bin Sultan Al Nahyan, founder and first President of the United Arab Emirates, and is currently managed by Mr Khadem Abdulla Al Qubaisi.

Vision and strategy define success in investment management

Beyond the obvious aim of getting return on investment, IPIC’s strategy applies a business philosophy based on risk analysis and vision. The fundamentals of Khadem Al Qubaisi’s investment choices are that profit growth is an important thing, but ultimately what matters most is the financial stability over the long term, the synergy between the companies that are being invested in (though it does not mean they necessarily all belong to the same sector of activity), sharing the expertise across the portfolio (be it financial or managerial) and not being afraid of change.

This all makes perfect sense in theory but can be hard to uphold in practice.Pressure for results is always on the mind of high level executives of every large corporation, and the temptation to go after quick wins is often tangible even if it means straying off the path of “the vision”. So what does it take for someone like Khadem Al Qubaisi to keep steering the ship in that same direction? Cool-headedness on the one hand, and trust from his superior on the other. The results plaid in his favour as over the past five years, IPIC’s consolidated assets have grown from USD 23.3 billion to USD 68.4 billion.

IPIC is a prime example of a successful strategy based on a vision of financial stability and long term investments, Khadem Al Qubaisi

From industry specific to diverse investments – Khadem Al Qubaisi’s strategy

Khadem Al Qubaisi

Khadem Al Qubaisi – managing director of the International Petroleum Investment Company.

Long term investment is certainly one thing, but being prepared for the future is also of the utmost importance. In the beginning, in IPIC’s case, diversification came from the globalisation of assets and the fact that they invested in several countries over most continents, but it remained highly coherent in terms of the industry (namely oil and gas). When this is the case, it allows a company to deepen their expertise, identify whether an opportunity is viable or not quicker and make more informed decisions as they know exactly what they look for in a partnership.

With an established business model and in an attempt to go further down the route of diversification, a major development came in 2008 shortly after Khadem Al Qubaisi’s appointment and after experts overseas said repeatedly that IPIC had a great reputation and a much-admired business model, yet was missing opportunities by focusing solely on the oil and gas industry. IPIC then acquired an initial stake in Aabar Investments, a diversified investment company, which allowed to pursue opportunities in much more diverse sectors, ranging from real estate to financial services to aerospace.

And herein lies another key to an investment’s company development strategy and success. Concentrate on your assets and what you do best first, become an expert, and when revenues start to grow significantly and you have more room to invest and take risks move on to other sectors and other industries. That is the direction that Khadem Al Qubaisi’s seems to have taken, and it appears to be working.

About IPIC

Directed by Khadem Al Qubaisi, IPIC is the International Petroleum Investment Company, formed by the Abu Dhabi government in 1984 to invest in the energy and related sectors across the globe. Today it manages a portfolio of investments in more than 15 leading companies across the hydrocarbon value chain, including exploration and production, shipping and pipelines, downstream retail and marketing, petrochemicals, power and utilities as well as industrial services.



There are 26 comments

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  1. Austin King

    Abu Dhabi is a beautiful country. IPIC certainly has had and still has a vision to this day. There’s something about honor and loyalty with a company and that’s what IPIC is all about. The asset’s also speak for themselves in terms of success.

  2. HannahV

    I like that: vision and strategy do indeed define a successful investment strategy. I try to remember that in my business dealings, and its truth shows in IPIC’s success so far.

  3. Judy Workman

    I agree with IPIC’s strategy. You have to apply a business philosophy based on both risk analysis and vision. You always have to take a risk when you invest. I think IPIC is an example of success. People should follow them as a role model for business.

  4. Felicia

    Wow, to have such a vision and reap the rewards is a true asset. As mentioned in the article, if you can figure out the long term benefits then you have the key to success. I guess investing in 15 companies and making billions proves that, right?

  5. Kristin

    I totally agree with this vision! I am not very financially savvy but this this seams like some really great ideas! It is very hard these days to become successful so I try to listen and take as much advice as I can. It is an absolute must to have a plan and a vision!

  6. Rich Pirrin

    I’ve always been a proponent of diversification, but IPIC has really exemplified the theory. As mentioned in the article, if you don’t you may be missing opportunities. In some cases that could mean losing millions,or even billions.

  7. Chris hollis

    Epic demenstrates great sucess in todays unstable and unpredictable world. Its hard in todays world to follow your vision and actually suceed but Epic has proven that it is possible

  8. Edi gibson

    It’s interesting to see the the Middle East’s perception of business growth. In the West “i.e. America”, they want to see growth from year to year and don’t think too far ahead. IPC”s are an interesting topic, good article!

  9. Connie Mastroianni

    I got 50/50 on how I would invest in this type of scenario. Seems alot like a stock market, where you put your money in, and if it does not work well, you will lost it. The article gives good information, but this type of saving is not the most safest.

  10. Lilian

    Very insightful article. I never heard of this company but what it has gone through clearly shows a strong leader and company. Diversification can be heard because of lack of expertise and cost. Long term growth is sustainable.

  11. Debbie

    What a great way to prepare for the future! So glad investing is working for him. The IPIC Strategy looks like a great plan to boost investing.

  12. Aaron Alcala

    Insightful and motivated article. Long term investments is something you dont normally hear. But i believe we need to take notes on how their businesses are running soo well.

  13. Vincent Agosta

    good information on investing money, however i would want to know more about where I can invest my money and the risks that are involved. I rather gain money and not lose it.

  14. Candice

    With the way the world is, I would be afraid to make any type of investment, but at least he can say that his investment was worth it! This was such an interesting read and I can’t wait for more.

  15. Becky Brooks

    Taking risks is one of the scariest things about investing. I like the approach of starting small and become an expert at something. Waiting for revenues to grow to move on to something else. Thanks for the article.

  16. Gary R

    Anyone who is involved in business whether small or large must be willing to seek some type of consistent growth. At the same time, they need to set up protective measures when investing in high risk ventures.

  17. deniel

    As mentioned in the article, if you don’t you may be missing opportunities. In some cases that could mean losing millions,or even billions. Its hard in todays world to follow your vision and actually suceed but Epic has proven that it is possible


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