Abu Dhabi’s Crown Prince Is Spending Billions to Bypass Iran’s Grip on Hormuz

(Bloomberg) -- Weeks before the Iran war began, Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed Al Nahyan took the helm of a $300 billion sovereign wealth fund. Now, months into a conflict that's reshaped the Middle East, this entity and the people running it have become central to building the infrastructure needed to override Iran's stranglehold over the Strait of Hormuz.

That imperative has come into sharp focus in recent weeks as L'imad Holding announced plans to take the strategically-important Abu Dhabi Ports Co. private at a nearly $9 billion valuation. People familiar with the matter said the fund is now likely to spend tens of billions of dollars more on new port infrastructure outside the embattled strait. It's a move that makes the crown prince's outfit a crucial player in helping develop vital Middle Eastern trade corridors as the emirate pursues a new strategy it calls 'Zero Hormuz.'

The wealth fund has become a key vehicle for Abu Dhabi's push to ease its dependence on the waterway that's been blocked by Iran, people familiar with the matter said, asking not to be named discussing information that isn't public.

While the son of Abu Dhabi's ruler and the powerbrokers surrounding him remain little-known globally, they're now helming one of the world's largest infrastructure efforts. That makes them crucial to Washington, international commodity markets and Wall Street bosses. Sheikh Khaled, who is in his forties, continues to play a key diplomatic role too, and recently became one of the highest-ranking Arab officials to meet Iranian President Masoud Pezeshkian.

After the Iran war began in February, the crown prince, L'imad's Chief Executive Officer Jassem Bu Ataba Al Zaabi and other Abu Dhabi officials highlighted their focus on securing national infrastructure during discussions with Wall Street bosses like BlackRock Inc.'s Larry Fink, people familiar with the matter said. By May, the wealth fund had an agreement with BlackRock, Singapore's Temasek Holdings and state giant Abu Dhabi National Oil Co. to jointly target up to $30 billion in infrastructure investments for energy transportation, logistics and water. Over time, that could also help the emirate export commodities from oil to petrochemicals and aluminum in the face of an increasingly belligerent Iran.