Abu Dhabi fund eyes direct private equity investments

The Abu Dhabi Investment Authority (ADIA), one of the biggest sovereign wealth funds in the world, is looking for direct investment opportunities in private equity and alternative investments after returns slowed in 2016, it said on Tuesday.
ADIA last year increased its exposure to direct private equity transactions and broadened its focus in Asian private equity markets particularly China and India, it said in its annual review.
ADIA’s 20-year and 30-year annualized rates of return in US dollar terms were 6.1 percent and 6.9 percent respectively in 2016. That compared with 6.5 percent and 7.5 percent respectively in 2015.
“As in 2015, these figures were impacted by the exclusion of strong returns in the mid-1980s and 1990s from the rolling averages, although ADIA’s real rates of return remain consistent with historical levels,” Sheikh Hamed bin Zayed Al-Nahyan, managing director of ADIA, said in the review.
ADIA manages a global investment portfolio across more than two dozen asset classes. It does not disclose its assets but the US-based Sovereign Wealth Fund Institute, which tracks the industry estimates them at $792 billion.
Sovereign wealth funds around the world are trying to find new avenues to boost returns in a period of relatively low interest rates and slow economic growth. Singapore’s GIC Pte. Ltd. warned last year of a decade of low growth.
In a drive to cut costs and gain more control, some state funds are striking their own private equity deals rather than relying on external fund managers.
ADIA also said its Alternative Investments department had launched a new Emerging Opportunities program to invest in asset types that fall outside the remit of ADIA’s other departments. That program will become active this year and help diversification, it added.
“Within our investment departments, we continued to expand our universe of investable asset classes and geographies, and deploy internal teams to proactively identify and originate attractive opportunities,” Al-Nahyan said.
“When viewed as a whole, ADIA ended 2016 on a positive note, with performance underpinned by respectable gains in global markets despite considerable headwinds from political events throughout the year.”

Source: Arab News