Abu Dhabi Investment Authority

The Abu Dhabi Investment Authority (ADIA) is a sovereign wealth fund owned by Abu Dhabi, United Arab Emirates. ADIA has never published how much it has in assets. As a result of this, there is some debate on how much the fund has under control. Accepted estimates have been between $650 billion to approximately $875 billion in assets. [ [http://www.economist.com/finance/displaystory.cfm?story_id=10533428 Sovereign-wealth funds | Asset-backed insecurity | Economist.com ] ] On November 26, 2007, ADIA agreed to invest $7.5 billion in Citigroup, the largest United States bank. This deal gives ADIA 4.9% of the New York-based bank, making it the largest shareholder, with Prince Alwaleed Bin Talal Al Saud of Kingdom Holding of Saudi Arabia the second-largest shareholder, with 4.3%.

History

ADIA was established in 1976 by Sheikh Zayed bin Sultan Al Nahyan, the founder of the United Arab Emirates. The goal was to invest the Abu Dhabi government’s surpluses across various asset classes, with low risk. At the time it was novel for a government to invest its reserves in anything other than gold or short-term credit. Even today, investment in short-term paper remains the strategy for the vast majority of countries.Euromoney April 2006 http://www.euromoney.com/article.asp?ArticleID=1018077]

Investments

ADIA manages a substantial amount of capital, and is one of the world's larger investment funds. Due to its size, the fund has been influential in international finance.

It manages the emirate’s excess oil reserves, estimated to be as much as $1 trillion.Euromoney April 2006 http://www.euromoney.com/article.asp?ArticleID=1018077] Its portfolio grows at an annual rate of about 10% compounded.Euromoney April 2006 http://www.euromoney.com/article.asp?ArticleID=1018077] As such, ADIA is the world’s second biggest institutional investor, behind only the Bank of Japan, according to the Oxford Business Group

Today ADIA invests in all international markets – equities, fixed income, real estate, private equity and alternatives (hedge funds and commodity trading advisers – CTAs). ADIA's global portfolio is broken down into sub-funds covering a specific asset class. Each asset class has its own fund managers and in-house analysts covering it. Almost every asset class is managed both internally and externally. Overall between 70% and 80% of the organization’s assets are managed outside.Euromoney April 2006 http://www.euromoney.com/article.asp?ArticleID=1018077]

More recently, as of June 2008, ADIA has started buying large amounts of residential real estate in London, New York, Chicago and Los Angeles. It is estimated that its UK portfolio alone is worth in excess of $4bn.

References

External links

* [http://www.adia.ae/ ADIA]
* [http://www.businessweek.com/globalbiz/content/jun2008/gb2008065_742165.htm Inside the Abu Dhabi Investment Authority - BusinessWeek]
* [http://www.nytimes.com/2008/02/28/business/worldbusiness/28fund.html Cash-Rich, Publicity-Shy, Abu Dhabi Fund Draws Scrutiny - New York Times]