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Tuesday, July 23, 2024

Abu Dhabi restructures sovereign wealth fund board



Sheikh Tahnoon bin Zayed Al Nahyan is set to become chairman of Abu Dhabi’s $790 billion sovereign wealth fund, cementing his power beyond positions as the United Arab Emirates’ national security adviser and head of the country’s largest bank.

Sheikh Tahnoon will become chairman of Abu Dhabi Investment Authority, while the emirate’s $272 billion Mubadala Investment Co. will be headed by his brother, Sheikh Mansour bin Zayed Al Nahyan, in the reshuffle announced Thursday by the Supreme Council of Fiscal and Economic Affairs.

Sheikh Tahnoon’s appointment puts him at the helm of one of the world’s largest sovereign wealth funds. The move comes as Abu Dhabi — one of the few cities in the world that manages more than $1 trillion in sovereign wealth capital — is looking to expand its influence on the world stage.

Sheikh Tahnoon – a black belt in jiu-jitsu – is already one of the most influential figures in Abu Dhabi, serving as the head of its smaller wealth fund ADQ, the country’s largest bank, First Abu Dhabi Bank PJSC, and private investment firm Royal Group. chairman of the board. He also oversees sprawling business empire International Holding Co., whose stunning surge in market capitalization has drawn scrutiny but failed to attract international investors, some of whom have privately voiced concerns about a lack of transparency.

‘the most important’

“It’s interesting how Sheikh Tahnoon is now leading the most important private investment vehicle, IHC, as well as the most important state investment vehicle,” said Karen Young, a senior research scholar at Columbia University’s Center for Global Energy Policy. “How IHC and ADQ are now involved in venture capital together means there is little distinction between private or state-owned entities in the Abu Dhabi investment landscape.”

Sheikh Tahnoon will take over ADIA as the fund is moving away from traditional passive investment strategies towards a more oriented approach to alternative asset classes such as private equity and infrastructure, which generate better investment returns.

Due to its sheer size, ADIA’s selection can have worldwide ramifications. It is already one of the largest investors in U.S. real estate, with recent deals including stakes in German rail cars, North American energy and Indonesia’s largest internet company.

political role

Apart from his business role, Sheikh Tahnoon is also recognized as an important political messenger. Investments in countries such as Turkey and Egypt often support efforts by his brother Sheikh Mohamed bin Zayed, the president of the United Arab Emirates, to expand his country’s influence.

“Certainly, the investment environment in the Middle East and globally is more geopolitical than it was a little over a year ago,” said Ryan Bohl, senior Middle East and North Africa analyst at risk intelligence consultancy Rane Network. People with foreign policy backgrounds fill these positions because the UAE deploys them strategically, as it did in Turkey and Egypt.”

The former ADIA chairman, Sheikh Khalifa bin Zayed Al Nahyan, died last year before his brother succeeded him as ruler of the UAE.

Sheikh Tahnoon and MBZ are one of six brothers known as Bani Fatima. They are both the sons of the third and most illustrious wives of Sheikh Zayed bin Sultan Al Nahyan, the founder of the UAE.

— With assistance from Dinesh Nair and Ben Bartenstein.

(Update to analyst comment in ninth paragraph.)

©2023 Bloomberg Intelligence


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