The Abu Dhabi government has sought to reassure the US over the growing influence of sovereign wealth funds, insisting it has not and would not use its investments as a “foreign policy tool”. The move comes as California considers restricting its pensions from investing in certain sovereign-backed private equity funds and as Congress examines possible ramifications of US assets owned by sovereign funds.
Abu Dhabi’s sovereign wealth fund, the Abu Dhabi Investment Authority, is one of the world’s largest with an estimated size of between $500 billion (€316.5 billion) and $900 billion (€570 billion).
In a letter to US Treasury Secretary Henry Paulson, dated 12 March and appearing in the Wall Street Journal, Abu Dhabi’s international affairs director Yousef Al Otaiba said ADIA should be treated like US pension funds, arguing the aim of the fund is to invest Abu Dhabi’s oil reserves for the future benefit of its people. “Investment income is used to improve education, health care, social programs, infrastructure and security,” he said.
Otaiba suggested foreign investors that “played by the rules”, such as ADIA, should not be discriminated against. He went on to say that while additional scrutiny of sovereign wealth funds was acceptable in terms of national security, it should also be “clear, fair and timely”.