Khaled Al Shamlan Al Marri: The Risk Castle - Discipline, Humility, and Long-Term Investing

What does disciplined investing look like when essential real assets and resilience sit at the heart of your strategy?

In this episode of The Exchange, Khaled Al Shamlan Al Marri, CEO of Real Assets at Mubadala, explains how infrastructure and real estate serve as the stabilizer within a diversified global portfolio, delivering consistent returns through structured risk, cash flow visibility, and disciplined execution.

Khaled introduces what he calls 'the risk castle': structuring investments around downside protection, alignment, and durability across cycles. He shares why real assets investors must stay grounded in fundamentals, especially during periods of hype driven by AI, digitalization, and decarbonization, and why conviction must always be balanced with humility and adaptability.

Reflecting on a 20-year journey through Mubadala’s evolution, Khaled speaks about building institutions that endure, investing with a long-term mindset, and laying the right foundations for the generations that follow.

From the summit push on Mount Kilimanjaro to building platforms that underpin everyday life, this conversation reflects on preparation over motivation, resilience under pressure, and the discipline to see things through.

 Episode Chapters:
(00:00) The role of real assets as a portfolio stabilizer
(03:30) Infrastructure, essentiality, and long-term value
(07:10) Building the “risk castle” 
(12:40) Data, judgment, and building conviction
(18:15) Investment process over individual talent
(24:00) Future-proofing strategy and institutions
(29:20) Mubadala’s evolution and economic diversification
(35:45) Agility, humility, and staying the course
(40:10) Leadership lessons from Kilimanjaro
(44:30) Meaning, impact, and long-term legacy

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Transcript

Khaled Al Shamlan Al Marri 0:07

If you look at Mubadala's history in the past 20 plus years, we've gone Mustafa through multiple iterations and versions in terms of how we work, how we strategize, how we organize ourselves. I think this is an important agility and adaptability, it's an important strength of Mubadala that we need to keep it and we need to protect it and we need to continue to have it.

Mustafa Al-Rawi 0:30

I'm your host, Mustafa Al-Rawi. It's my great pleasure to welcome to the exchange, Khalid Al-Marie, CEO of Real Assets at Mubadala. Khalid, good to see you.

Khaled Al Shamlan Al Marri 0:40

Thank you. It's a great pleasure to be here and thank you for having me.

Mustafa Al-Rawi 0:43

I mean, I wanted I want to dive into this whole idea of real assets at Mubadala because it's it's when I think of it and I read about it, I see there are ports, there are logistics, there are airports, there's obviously infrastructure, literally what what is real and tangible. But there is a kind of thread that joins them all together when it comes to to Mubadala. And it'd be good to kind of understand the context of how real asset sits within the wider business and and what you know what drives those investment choices.

Khaled Al Shamlan Al Marri 1:19

Well, I think you know, in any investment firm, the way you construct your portfolio has to be driven by a set of principles. And one of those principles is diversification. Um, and when you think of real assets and how it fits into Mubadalaa, it's from that diversification angle. So it's supposed to be the asset class that delivers stable returns in a consistent way, kind of low risk, uh, that complements the overall portfolio. Sometimes we call it the stabilizer. So this is really how it fits it.

Mustafa Al-Rawi 1:54

And the it's when you say stability, that's kind of in my mind, I think, long-term. And the and the and these are the kind of assets that you you know will be there 10, 20, 30 years. And are those the horizons that you're that you're working along?

Khaled Al Shamlan Al Marri 2:10

That's I mean, that's the whole essence of real assets is to invest in businesses that are physical, hard assets that you can touch that will be there for a very long time. And that will be super essential to the economy. So the essentiality of real assets, whether it's a real estate or infrastructure, whether it's a port or a building, that essentiality makes it by default a long-term investment. And that's the beauty of uh of real assets, whether it's infra or real estate.

Mustafa Al-Rawi 2:46

We think of that of infrastructure and logistics and ports and and and real estate. Um, it it you know, in the past they would have probably been you know unchanging, maybe, and and they would have been, you know, a bridge is a bridge, uh, a road is a road, a port is a port. But now we have forces at work in the world that are kind of propelling economies, um, creating opportunities, but also creating challenges that are sort of swirling around real assets, such as digitalization or decarbonization, or the fact that there's a lot of infrastructure out there that's that's aging. And you know, we think about you know how these forces are at work. And so you kind of need to think how these affect your investments and how these kind of impact value and and and ensuring that you're you're meeting your your returns and what you need.

Khaled Al Shamlan Al Marri 3:41

I think you you mentioned an interesting point. Um, today, real assets, it's not about ports or bridges or buildings, it extends beyond that. And that's the beauty of this asset class, is it will always be the foundation and the enabler for every strategic shift, whether it's a macro or a big trend like decarbonization, digitizations, or globalized deglobalization, the supply chain, etc. I think as a real asset investor, sometimes when there is a lot of hype and momentum in some of those mega trends, whether it's digitization, and you hear today about the data centers turbocharged by AI, uh power, supply, demand, imbalance. Whenever there's hype and momentum, as a real asset investor, it's important to stay disciplined and stay focused and driven by fundamentals because you are so essential to that mega trend. You don't have to be carried away by that kind of momentum. You need to stick to the original roots of you being an infra or a real asset investor, which is you want to look at things like um visibility into the cash flow. There has to be some off-takes and contracts that protect your uh top line. It has to be inflation-linked, it has to have some monopolistic features. So you don't have to get over excited because mistakes happen when you get over-excited and try to chase. Uh, and what happens is that you start venturing outside the risk parameters of infrastructure.

Mustafa Al-Rawi 5:28

Uh, you you've said before that return is the outcome of structured risk. And is that essentially what what you've been describing?

Khaled Al Shamlan Al Marri 5:36

Exactly. So, but I think to simplify this, because when you hear structured risk is is um uh it's kind of you know it's a big term, but I'll try to simplify it. So if you invest today, whether as Mustafa or as an organization, as Mubadalaa, you target a certain return, right? And once you understand the target return that you want to take, that you want to target, uh, which is a function of the risks, then you need to construct your risk. I call it risk castle. So, which is basically the same term as structuring your risk. You want to make sure that you add all the terms and all the features into the agreement, into the shareholder agreement, into the share purchase agreement to protect against those risks. So structuring risk is very, very important. And I think investors need to spend more time understanding the downside and trying to structure around it rather than spending most of the time thinking about what would go well. So I think you know, we tend to spend more time on what would go well vis-a-vis what could go wrong.

Mustafa Al-Rawi 6:50

So, I mean, I like that expression of risk castle. In my mind, it it creates something very tangible and and very strong. And and and you talk some of the factors that you you mentioned, uh they seem like common sense. Um, but but what is behind those decisions? Is how much of it is common sense intuition versus data-led? And then you know, you you you say that some some of the the the upside or the the returns are going to be you know contracted, but then you need to be sure of the downsides. So it's sort of conviction versus certainty as well. So what what's kind of the the ideal balance if if anybody is thinking about taking this approach uh to investing in in real assets?

Khaled Al Shamlan Al Marri 7:34

Well, first let's agree on something. You will never ever have perfect data. So data will always be imperfect and there will always be a missing part. Um what fills that uh incompleteness or imperfection is the judgment, right? And the judgment is a function of your experience that gets refined and honed through experience. So when you make an investment decision, let's say you're gonna invest in a midstream pipeline that takes gas from point A to B, you will base your investment decision on data from the past. So you want to make sure that you get as much data as possible, and you want to make sure that you get as accurate data as possible because you cannot get 100% accurate data and you cannot get 100% complete data, but you want to try your best to get the best possible, then you will underwrite certain assumptions in the future. That underwriting of the future is a function of the historical data and your judgment, which is a function of the experience. You need to learn from the stories of success, you need to learn from the stories of failure, and that actually forms your judgment and then forms the conviction that you have and the belief that you have about that specific thesis. And conviction is always a function of the depth and the quality of the work that uh you do. So that's basically where you balance between kind of you know data, intuition, and judgment. Um but what's more important than this, you can have the best people that form the best judgments or people that have the best skills. What matters the most is having the right investment process that continues to evolve and gets refined and gets better day after day, month after months, year after year. Without that investment process, you can have the best skills, you can have the best judgment, but it's not gonna work. You can have 11 Cristian Ronaldos in one team, but if they don't have the right process or the right strategy or the right tactics, it's just not gonna go anywhere.

Mustafa Al-Rawi 9:55

I mean you you brought up a lot of points that I want to get into, you know, for example, talent and teams and and leadership. Um, but you you you you mentioned experience. And so, you know, if today, you know, when when I look at your your position and your career and and and what you're doing, um you have that vantage point when you talk about investment process. You're on the investment committee in Mubadala, you head up real assets, but then if I if I look at experience, it's been a 20-year career with Mubadala for you, going all the way back to when you started out as a as a trainee with Mubadala and you've seen this institution grow and go through successes, challenges, opportunities. Um, and and so when you when you you know if I if I ask you to kind of think about that 20-year process, is is it that those 20 years with Mubadala that that really informs that conviction, that intuition, that judgment that you mentioned?

Khaled Al Shamlan Al Marri 10:53

While experience is important, the whole ecosystem, the whole institution, and how the whole institution functions is is far more important than experience alone. You want to make sure that you have, let's take Mubadala as an example, you want to make sure that you have the right processes and the right forums to communicate with your people vertically and horizontally. You want to make sure that you have the right decision forums that has the right composition of the complementary kind of skill set that debate decisions and make investment decisions. You want to make sure that you have the right environment and culture that provides growth learning opportunities for people. Um, you want to have the right values, you want to have the right leadership.

Mustafa Al-Rawi 11:53

And again, to to focus on on your career a little bit, because I understand the ecosystem, the institution, mubadla as a as a place at large in the processes and the people around you. But also you've you've seen different phases of of growth in Mubadala, but also you've seen different units. So you've you started out on the semiconductor side, for example, and and and maybe you've come full circle a bit now, where in real assets you're having to see um you know how the semiconductor business has moved on. And maybe when you started out, it was in a completely different part of the cycle, and then you you went into sort of dis disruptive investments and disruptive assets, and again, those are the same forces that are kind of influencing some of the investment decisions that you're making. Do you carry that with you, the knowledge of what you've experienced in a 20-year career?

Khaled Al Shamlan Al Marri 12:50

So I think if you look at the next few years, it's hard to visualize it. But what we have today, we have control over today, right? So we can shape how today looks like and make it ready for the future. So as a Mubadalaa um investment firm or as uh real assets platform or as Abu Dhabi or as the country, you want to make sure that what you're building today is gonna be sustainable for the future. And what you leave for the next generation is gonna be something that will be ready for what comes next. So, in the real assets platform, we spend a lot of time thinking about how we can devise a strategy uh that is um future-proof. How can we devise a strategy that invests in areas and sectors and assets that will be resilient, that will be um uh well prepared for the next cycle? Uh, how we build our organization in a way that can withstand uh different circumstances and challenges and continue to be there. Same thing in the country, you know, you want to make sure that you build an economy that is well diversified, that is sustainable, that is resilient, that when you pass it on to the to the future generation, they'll thank you for it, right? So they're not gonna give you a hard time and have to go and rebuild and take them five years uh back. So having that mindset about the future in every single act and action that you take in the present is so critical. And because you know, capital doesn't build nations, right? So it's about men with strong value, right? So you have kids, and if you leave uh you know money and and capital to your kids without skills and values, what's gonna happen?

Mustafa Al-Rawi 14:58

Yeah, they they they will they will lose it all. Exactly. And if we're talking about future generations, you know, how how has your experience, you know, I mentioned your career, but also you've lived not just in the UAE, Abu Dhabi, but also elsewhere in in Singapore, you've spent time in the US. How does that shape your your thoughts around developing that talent, about leadership, about ensuring that you're you know, you you've talked about teams, you know, you mentioned 11 Cristiano Ronaldos. Let's let's say you know you you you have that you you have that brilliant team, you have brilliant people around you. How do you how do you help to lead them? How do you ensure that they are able to to be empowered and to follow at the same time?

Khaled Al Shamlan Al Marri 15:44

Um I was very blessed and and fortunate to have had the opportunity to uh live in different parts of the world um at different stages of my life and at different stages of maturity. Living in the US when I was a student, um as a student you tend to learn, you're coming out of a culture into a different culture, you tend to learn more about self-reliance, about independence, about respect, tolerating other cultures. Um and what's more important is that you tend also to test some of the values that you learned uh during your upbringing and some of the perceptions that you formed uh in your kind of home country and culture. Um sometime some perceptions driven by traditions, you test them and you know you think that you need to that reinforces the importance of those values. Uh sometimes you kind of look at things from different angles and you learn something during your upbringing, but when you go into a different culture, you start test it and and look at it from a different angle and maybe learn new things about it. I'll give you an example. So in our culture, usually when we have conversations with people, you know, we don't tend to be direct and and straightforward. We like to kind of you know um, you know, go into kind of circles and sometimes um we um we try to avoid having difficult, candid conversations, but when you go into a different cultures like US, people are straightforward, people are direct. So uh so you tend to kind of try to strike the right balance. Um and and and that's the beauty of of living in a different part of the world. So now if you go to Singapore, I live there with my family and I was an employee. I used to work in a in a fab uh in global foundries. Um, and as an employee, uh kind of you know, at uh more mature part of your life, you have deeper interactions with your colleagues, you tend to learn different things, how business organizations in different parts of the world function, uh, what values are important to them. Um so it's a different set of learnings. Also, as a family, being there with my family and kids, they go to school there, you live the expat life, so you appreciate how expat in your home country think and you can relate to them. Um and you learn a lot of interesting things about the society. Uh in Singapore, it's a society that values process, uh, they value planning, they value systems, etc. So it broadens your horizon. It makes you more kind of at the 360 leader. Um, and you know, leaders need to have broad horizons and need to be able to work with different uh people, people with different ideas, with different cultures, with different values. That agility and flexibility um is something that um uh that you learn um faster and and and more when you interact with different cultures and different people.

Mustafa Al-Rawi 19:18

And you know, speaking of testing, um you've tested yourself um in extreme situations, climbing mountains, um, you know, cycling challenges, um, you know, you've been you've been in nature, you've survived, you've thrived maybe in in in when you when you've tested yourself to your limits. How does that that experience when you test yourself play out in your in your career and and and and your success?

Khaled Al Shamlan Al Marri 19:54

Listen, I think if we're gonna talk about these experiences, we need like a whole vodka and another hour. But maybe I'll try to pick uh one experience which is uh climbing Kilimanjaro. Um as you know, Kilimanjaro is is the highest peak in Africa, it's about 5,800 meters, and it takes four days uh to reach the top, and usually you go through different climates. The fourth day, which is the very, very tough day, which is the summit push, um which is the final push to the top, and it's very Arctic climate, frozen, snow, windy, dark, because you start the summit push at midnight. So you're not well fed because of the altitude sickness, you know, it's pretty hard to eat, uh, you don't have sleep, um, and you need to start at midnight. Um and it's quite steep, you're super tired, and you need to go step by step. That last summit push, last day, that's where actually most of the experience uh you get with these experiences. So imagine how many times in your life you had a conversation with yourself about giving up. It's enough. I gotta go back. Many times. Once every five years, once every 10 years, right? Once every few years? Sounds like you had a lot of time. I love it.

Mustafa Al-Rawi 21:32

Yeah, yeah. I mean, I'm thinking, I'm thinking I've had many conversations, but when when what you've described in that moment when you have to climb the summit, that's what you're there for. You've come all that exact way to do that.

Khaled Al Shamlan Al Marri 21:45

Exactly. Now let me tell you so, and that summit push, which takes about 10 to 15 uh hours uh on the way up and way back, almost every no exaggeration, every five to ten minutes, you have that confidence. Conversation with yourself. What am I doing here? What am I trying to prove? And it just it's a very logical step to quit and go back. And when you overcome that conversation on and on and on hundreds of times in one day in a compressed period, that's the experience. That's where you stretch your limits. It becomes a reinforcement that it's about the mental strength. It's about the mental fitness, not the muscles. It's about that brain that talks to you. And that actually takes us to the second learning in this experience, which is preparation is important. Preparation is very, very important. It's a lot more important than motivation. So motivation will get you somewhere, but you're not gonna finish, right? You need to the acclimatization, the training, uh the hours that you spent kind of, you know, preparing to simple things like the gear, right? And by the way, when you climb there, you have people with you that help and support, you know, carry the uh the bags and the gear, etc., and they sing for you, trying to motivate you. The akuna matata uh song. Uh but you know, that's not gonna help you if you don't have the right jacket, if you don't have water, if you don't have the right tablets for the altitude sickness, if you don't have that mental strength. So motivation will get you somewhere, but you know, to reach the finish line, preparation, training, uh, getting ready is is is far more important.

Mustafa Al-Rawi 23:40

And when when you're leading teams and you understand there will be a moment in a difficult situation when everyone questions their motives, you remember that if you're prepared, if you're well prepared, you're well motivated, you know what you're trying to do, then you can you can accomplish what you what you set out to do.

Khaled Al Shamlan Al Marri 24:02

100%.

Mustafa Al-Rawi 24:05

And I think it'd be good to know from from our perspective when when you think about the next 10 years, and if you're looking back and you think about the investment decisions that have been made and the journey that Mubadala would have been on. Looking back, what what do you hope you can say yes? That's we set out to do that, and that's what we accomplished.

Khaled Al Shamlan Al Marri 24:35

I think maybe this takes us to maybe talk a little bit about the early days of Mubadala when Mubadalaa uh started and the impetus behind the creation of Mubadalaila, and want to understand the history of Mubadalaa or the spark that actually uh got the Mubadalaa to be created, it's important to understand the history of the UAE, the history of Abu Dhabi. So if you go back before uh oil, um we were a group of small coastal towns, right, living on pearl uh trading, uh small-scale agriculture, fishing, camels, dates, etc. And when Sheikh Zaid, the founder of the UAE, Rahmit Allah Ali, uh when he became the president in 1971 and UAE was established, the Union of the Seven Emirates, um Sheikh Zaid had a country that pretty much had nothing in terms of public institutions, in terms of infrastructure, in terms of roads, bridges, airports, schools, hospitals. There wasn't much there. So his focus and his priority during that 30-plus period that he ruled was how to lay the foundation for the future generation, goes back to uh our point about passing you know uh legacy to the future generation. So he focused on building the foundation in terms of public institutions, in terms of schools, in terms of infrastructure, hospitals, bridges, uh ports, uh, etc. And he wanted to make sure that the successors they come with foundation already laid. And that's exactly what happened when the successor Sheikh Khalifa and currently Sheikh Muhammad, Allah Father Kaw Bemra, he basically has a country that is ready, right? That has all the foundations, and um he just needs to start thinking about the future. What comes next? How can I take this country to the next level, which is building um sustainable uh economies, uh diversified economies, innovation-based, knowledge-based economies, and and that's why you hear the bets like you know, UAE making bets on AI and decarbonization and playing a key role in these mega trends, uh, because they had all the time to think about what's next back in the early 2000, 2004, around the times when Mubadara started. So when Mubadara started in 2004, it was during that time where the whole kind of country and leadership is thinking about what's next. And that was the impetus behind creating Mubadalaa to be a force for economic diversification, to be a force to take the country and the economy to the next level. Um, and today, I think you know, 20 plus years fast forward, seeing Mubadara becoming a 330 billion um uh sovereign wealth fund, super successful top quartile from a performance perspective amongst its peers, it's it's very fulfilling. But what's more fulfilling, not the returns. Maximizing returns is important uh because this is how you see you sustain yourself. But what keeps us going, what keeps us like waking up every morning excited to go to work, is the impact. It's the impact that we're creating, whether locally in building industrial champions that become globally competitive, or creating jobs, or creating um economic activity in our country, or maybe building a port in a low-income area in X country that creates jobs that improve the quality of life, uh, or addressing some global challenges such as climate, energy transition, um, or producing beautiful products that go into you know cars or go into phones. Uh this is this is what excites us. It's the meaning, it's the impact.

Mustafa Al-Rawi 29:12

And and 20 years ago when you started out at Mobadler, did you have a sense of that spark of that of that impact that you wanted to help?

Khaled Al Shamlan Al Marri 29:20

We had a dream. We had a dream. Um our mandate was clear, we had clarity in terms of the direction of travel, and that's important. So the vision was clear. Uh, we knew where we were going. Uh, but we started uh basically, you know, there was nothing. It was uh and and and the time where we started, corporate mindset, corporate culture was a new thing here in the UAE because the large the biggest employers were the government and some you know kind of uh government-affiliated uh industrial uh firms. Um, so having these kind of investment firms wasn't, you know, there was Abu Dhabi investment authority, but the culture was was new. Um and so we had to have the humility to learn. Uh, that made us as an organization very agile and very adaptive and always willing to pivot when circumstances change. To me, this is an important strength of Mubadara. We are humble enough to acknowledge the areas where we need to learn or partner with partners or uh develop, etc. But if you combine this humility with conviction, because when you form a perspective to go into a certain direction, you need to have the conviction. This has to be based on data, based on judgments, based on a strong conviction. And when you have that conviction, you just stay the course. You stay the course, but when circumstances change, you have the humility to pose, reflect, reassess, and make the right changes. And if you look at Mubadala's history in the past 20 plus years, we've gone Mustafa through multiple iterations and versions in terms of how we work, how we strategize, how we organize ourselves. Um and I think this is an important agility and adaptability is an important strength of Mubadala that we need to keep it and we need to protect it, and we need to continue to have it. Um and um we're gonna continue to evolve and it's gonna continue to be a fascinating journey, and I think we're far from you know uh where we see the potential.

Mustafa Al-Rawi 31:46

As a last thing um for our audience, it'd be great to understand for you if in any moment of truth, if there is a film or a podcast or a book that you think of that inspires you in that moment that you'd you'd like to kind of highlight to to the audience.

Khaled Al Shamlan Al Marri 32:08

Um you took me to uh the good old times uh when I was in Singapore. Um so I decided to go and take a couple of days uh just on my own. Um and I went to Bali alone and I took a book that someone recommended it to me. Uh it's written by Robin Sharma. It's called Um I don't know the exact order of the title, uh it's called The CEO, the Surfer and the Saint, or the Saint, the CEO, and the Surfer. And the main point in the book is that everything happens in your life for a reason. And most likely for a good reason. Whatever happens to you in life, there is a good reason for it. Whether it's something that you did not think you were happy with or you wanted, uh it will turn out to be actually the right thing that happened to you. And I took this principle to support me as I evolve in my life and career, uh whether it's personal or professional, uh, not to fight, you know, uh the circumstances, but to adapt, to live with it. Uh and try to just wake up every morning and just do my best. And things are gonna take care of itself. And this has been an important principle for me that I am so so grateful to. And it's something that I always try to teach my kids uh or advise, you know, some of my friends uh and colleagues.

Mustafa Al-Rawi 33:50

Well, I appreciate it. And thank you so much, Khaled Al Marie, for being with us in the exchange.

Khaled Al Shamlan Al Marri 33:56

Thank you. It's a great pleasure.