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Abu Dhabi’s ADIA revamps external equities division
Sovereign wealth fund restructures external equities dept; A son of UAE president to head new indexed funds dept; ADIA restructured internal equities division in 2007
August 22, 2011 2:54 by p.deleon
The Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds, has restructured its external equities department, separating indexed funds from active funds as part of a more focused strategy.
Sheikh Mohammed bin Khalifa Al Nahyan, son of the President of the United Arab Emirates and ruler of Abu Dhabi, Sheikh Khalifa, has been appointed to head the newly-created indexed funds department.
The other, external equities department will be headed by Obeid al-Suwaidi, who was previously director of external funds for the Far East.
Earlier, ADIA had four departments, all external funds equities on a geographical basis — Europe, North America, Far East and emerging markets. These four departments allocated funds to external managers, some of which were actively managed, and some indexed.
Now, the four departments are being merged into one for the active funds while a new indexed funds department is also being set up. The restructuring was done internally in July.
“The creation of our new indexed-funds and active departments will streamline how we manage our relationships in the equities space with external fund managers,” an ADIA spokesman told Reuters.
“But it also forms part of our broader efforts to continually enhance the way we share and pool our knowledge and resources across the organisation,” he said.
ADIA, whose assets range from Citigroup bonds, to a stake in Britain’s Gatwick airport, allocates over 60 percent of its portfolio to externally-managed indexed funds. In 2007, ADIA had restructured its internal equities department.
At least 46 percent of the fund’s portfolio in 2009 was allocated to equities, with a minimum of 35 percent in developed markets and at least 10 percent in emerging markets, ADIA said in its annual review released last year.
Since the start of this year, several Abu Dhabi government-backed entities have revamped their boards and top management as the emirate grappled with a slowdown in the real estate and financial sector. Abu Dhabi is the capital of the UAE, the world’s third largest oil exporter. By Stanley Carvalho
(Additional reporting by Dinesh Nair, Editing by Andrew Hammond)