ADIA reduces reliance on external fund managers

The preeminent sovereign wealth fund of the United Arab Emirates, Abu Dhabi Investment Authority reduced its reliance on external fund managers in 2017, as the investor continues to bolster its in-house investment team.

According to ADIA’s 2017 annual report, 55 percent of its assets under management were managed by external fund managers last year, down from 60 percent in 2016.

Hamed bin Zayed Al Nahyan, ADIA’s managing director, said in the report that the investor continued to evolve and refine its organisational structure and processes in 2017.

On the personnel front, he added: “Having spent a number of years building its internal capabilities, 2017 was a year of consolidation for ADIA on the recruitment front, as we sought to fine tune our skillset to meet specific needs. The Internal Equities Department, for example, made new appointments to its Europe and Japan teams and to the Department’s support functions, while Private Equities appointed a new Head of Asia-Pacific and Head of Industrials as part of its organisational redesign.”

Late last year, PERE reported about the senior movements in ADIA’s real estate and infrastructure departments, reflecting an increasing focus on asset and portfolio management. This included news of Todd Rhodes taking on the role of head of Asia-Pacific, and ADIA’s head of Americas Tom Arnold getting an additional role of deputy head of global real estate.

ADIA’s target allocation to real estate, as per its long-term policy portfolio, is between 5 percent (minimum) and 10 percent (maximum). The investor noted in the report that its pace of real estate acquisitions moderated last year in light of maturing investment cycle, while it also made some exits to take advantage of strong capital market conditions in some areas.

Overall, ADIA’s portfolio recorded 20-year and 30-year annualized rates of return (in US dollars) of 6.5 percent and 7 percent respectively, as of 31 December 2017, up from 6.1 percent and 6.9 percent in 2016.