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DUBAI, Oct 27 (Reuters) – The Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds, said it delivered strong returns in 2021, driven by a bumper year for the stock market.
ADIA, which has an estimated $708 billion in assets under management, also said in an annual report that it restructured various aspects of the organization, consolidating divisions and centralizing processes.
Its 20- and 30-year annualized returns (on a peer-to-peer basis) were both 7.3% at the end of last year, up from 2020 percentages of 6% for 20 and 7.2% for 30.
“ADIA looks for opportunities in regions and sub-regions with high long-term potential and continues to expand its direct investment in the private market,” said the Abu Dhabi-based fund.
“It also benefits from the opportunity to position equity portfolios to take advantage of emerging trends, including varying government responses to the pandemic.”
ADIA’s long-term portfolio strategy ranges from 45% to 60% in North America, 15% to 30% in Europe and 10% to 20% in emerging markets, it said. By asset class, 32% to 42% are deployed in developed equities.
On the restructuring front, the fund has created a Core Portfolio Division (CPD), which it says allows “to provide ADIA with more efficient and flexible trading and rebalancing”.
It established the Central Investment Services Department (CISD) to create a “single point of view” for the entire organization’s entire portfolio and effective investment support activities.
ADIA said it also increased the autonomy of front-line managers, part of a broader push to simplify internal systems and improve the ability to act quickly on rapidly changing opportunities.
As a result, the fund’s overall headcount has decreased, but it has not been disclosed by how much. ADIA has 1,520 employees, the report said.
Sources told Reuters in March, ADIA lays off dozens Save approximately AED 1 billion ($272.26 million) and make the organization more agile and efficient.
The annual report identified “significant recruiting activity” in parts of ADIA, including private market and systematic quantitative investments, as it aimed to improve data analytics capabilities. Such hiring will continue in 2022, it said.
(1 USD = 3.6729 UAE Dirham)
Reporting by Youssef Saba; Editing by Josie Kao
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