ADIA takes back more of its money

Abu-DhabiThe Abu Dhabi Investment Authority (ADIA) last year withdrew 5% of its assets from external investment firms, deciding instead to manage them in-house by its own teams.

The move, revealed in the authority’s 2015 report, continues a trend that saw the sovereign wealth fund take back a tenth of its assets from external managers in 2014.

According to the latest report, the authority now manages 40% of its money itself, compared with 35% in the previous year’s report.

Founded in 1976, ADIA invests profits from Abu Dhabi’s state-owned petrochemicals industry to benefit future generations of its citizens. The authority has a long-standing policy not to reveal its wealth, which is believed to be the among the largest of any sovereign wealth fund.

According to a US-based consultancy, the Sovereign Wealth Fund Institute, ADIA has an estimated $792 billion under management. ADIA will not say whether this estimate is accurate.

Elsewhere in the report, the authority stated that its average yearly return for the past 30 years, as calculated at the end of 2015, was 7.5%, a decline of 90 basis points compared with the previous year’s report. The authority’s 20-year average yearly return was also down.

According to a statement attributed to Hamed bin Zayed Al Nahyan, managing director of the authority and a member of Abu Dhabi’s ruling family, the decline came “primarily as a result of strong returns from the mid-1980s and 1990s falling out of the rolling averages over the periods in question”.

Last year’s choppy markets may also have played a role in pushing down average returns. The authority “put in a creditable performance in 2015 despite volatile market conditions that saw equity markets end the year little changed from where they began”, reads Al Nayhan’s statement.

©2016 funds global mena

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