#AbuDhabi’s Top Wealth Fund Boosts Private Equity Allocation - Bloomberg

Abu Dhabi’s Top Wealth Fund Boosts Private Equity Allocation - Bloomberg

The Abu Dhabi Investment Authority, which manages around $1 trillion in assets, plans more investments in the private equity sector, underlining its clout as a globally influential dealmaker.

ADIA last year boosted it targeted allocation to private equity to 12%-17% of its overall portfolio, according to its 2023 annual review published on Thursday. That was up from 10%-15% a year earlier. The allocation to all other asset classes, including developed market equities or real estate, remained unchanged.

The fund’s increased focus on private equity comes as rising interest rates last year damped dealmaking activity in the sector which plunged to its lowest level in five years, according to the review.

Despite the challenges, ADIA’s private equity department made over 20 direct investments of more than $150 million. It also invested in some of its existing portfolio companies to support growth opportunities including acquisitions, it said.

Last year’s market dislocation also meant that private creditor providers increasingly play a major role in funding leveraged buyouts, according to the report. ADIA made further inroads in that space, anchoring several investments in platforms such as Jefferies Credit Partners’ Direct Lending BDC and Overland Advisors, a partnership between Centerbridge and Wells Fargo that’s focused on non-sponsored middle-market direct lending.

“Overall, ADIA was well positioned to capitalize on the strong gains in parts of these markets, while benefiting from dislocations in areas where conditions were more challenging,” said ADIA’s managing director Hamed bin Zayed Al Nahyan.

ADIA’s widening interest in private equity and credit is one of the many ramifications of the fund’s internal overhaul that took place in recent years.

The investment behemoth adopted a more data-driven approach by reorganizing departments and setting up an in-house team staffed with more than a hundred artificial intelligence, computing and math scientists with the aim of making the entire fund more nimble and faster in its decisions.

ADIA is one of several Abu Dhabi sovereign entities that combined manage almost $1.7 trillion in wealth, according to consultancy Global SWF. That’s helped the emirate’s financial center attract some of the biggest international names in asset management and investing.

“In private equity, for example, ADIA has leveraged its often decades-long relationships in the sector to broaden and deepen how it accesses the sector, and ultimately enhance returns,” said Al Nahyan.

In the first three quarters of the year, ADIA and Abu Dhabi’s two other main funds together invested $36 billion across the globe, according to data from Global SWF.

Looking forward, ADIA in its review pointed to the various elections that took place around the globe, saying that voters’ decisions will have significant impact on domestic policy and relations between countries.

Even as financial systems worldwide could again prove resilient to geopolitics, “this is no cause for complacency, as an unpredictable outlook often has real-world outcomes that eventually cascade down to financial markets,” Al Nahyan said.

Gulf bourses end mixed with focus on Fed | Reuters

Gulf bourses end mixed with focus on Fed | Reuters

Stock markets in the Gulf ended mixed on Thursday as investors assessed the monetary policy and inflation outlook in the world's largest economy.

Traders responded to a U.S. inflation print that was in line with expectations by ramping up bets on a Federal Reserve rate cut next month, though there was less certainty on what would happen after that given Donald Trump's return to office.

FEDWATCH
The Fed's decisions have a significant impact on the region's monetary policy, as most currencies there are pegged to the U.S. dollar.

Saudi Arabia's benchmark index (.TASI), opens new tab declined 1.2%, weighed down by a 0.4% fall in aluminium products manufacturer Al Taiseer Group (4143.SE), opens new tab. Saudi Telecom Company (STC) (7010.SE), opens new tab dropped 2.2%.

The kingdom's sovereign wealth fund PIF has raised 3.86 billion riyals ($1.03 billion) from selling a 2% stake in telecoms firm STC, PIF said on Thursday, as it seeks to raise funds for the Gulf country's economic diversification programme.

Dubai's main share index (.DFMGI), opens new tab eased 0.1%, hit by a 1% fall in top lender Emirates NBD (ENBD.DU), opens new tab.

In Abu Dhabi, the index (.FTFADGI), opens new tab , helped by a 1.5% rise in conglomerate International Holding (IHC.AD), opens new tab.

However, Lulu Retail Holdings (LULU.AD), opens new tab - Middle East's biggest hypermarket chain operator - finished flat in market debut.

The Qatari benchmark (.QSI), opens new tab added 0.3%, with petrochemical maker Industries Qatar (IQCD.QA), opens new tab rising 1.7%.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab edged 0.1% higher, led by a 1.5% gain in tobacco monopoly Eastern Company (EAST.CA), opens new tab, a day after report a steep rise in first-quarter profit.