ADIA’s evolved real estate strategy favours direct

From a plan hatched in 2006, the sovereign wealth fund’s Real Estate Department (RED) has laid the foundations for a more direct real estate investment strategy that will see it assume more control over its capital outlays.

It was the cornerstone investor every GP dreamed of luring. But these days, ADIA is more likely to be your equal investment partner than your limited partner.

Over the past four years, the sovereign wealth fund’s Real Estate Department (RED) has been quietly executing a strategy aimed positioning the group for the long term.

At its core is a movement from investing indirectly, often through traditional private equity real estate structures, to a more direct approach, via structures such as joint ventures, investment clubs or even in scenarios where it is the sole investor.

In an unprecedented exercise, PERE visited the Abu Dhabi Investment Authority at its headquarters on Abu Dhabi’s Corniche, with the sole purpose of understanding how RED is delivering its strategy.

Bill Schwab, the department’s global head of real estate, Tom Arnold, head of Americas and Mike Goodson, head of hospitality, took the best part of two hours to relay to us where the business has been and, more importantly, where it is going and how it aims to get there.

Details of ADIA's evolution are included in a report in the March issue of PERE magazine (subscribers may view the article here).