Private Equity News & Analysis

ADIA reduces reliance on external fund managers

Fifty-five percent of Abu Dhabi Investment Authority’s total assets under management are managed by external managers, down from the previous year, according to its 2017 annual report.

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Abu Dhabi Investment Authority, the world’s third-largest sovereign wealth fund, reduced its reliance on external fund managers last year and continues to bolster its in-house investment team.

According to ADIA’s 2017 annual report, 55 percent of its assets under management were overseen 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.”

In October ADIA named Nancy Ku, former president and chief executive of GE Capital China, as its head of Asia-Pacific, private equities.

ADIA restructured its private equities department in the last year as part of its strategy to increase direct investments, moving from a product-focused approach to regional teams with expertise in five key industries: healthcare, financial services, industrials, technology and consumer.

The sovereign wealth fund opened its Hong Kong office in October 2016 and has since increased its exposure to the “rapidly developing” Asian private equity markets, as previously reported by Private Equity International.

Hong Kong-based Affinity Equity Partners, India-focused Kedaara Capital and Chinese manager CDH Investments are among the Asia-based private equity firms ADIA has backed.

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

– Carmela Mendoza contributed to this report.

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