By Yousef Saba
DUBAI (Reuters) – The Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds, said it delivered strong returns in 2021, buoyed by a bumper year for stocks.
ADIA, estimated to manage some $708 billion in assets, also said in an annual report that it restructured several aspects of the organisation, combining units and centralising processes.
Its 20-year and 30-year annualised rates of return – on a point-to-point basis – were both 7.3% at the end of last year, up from a 20-year rate of 6% and 30-year rate of 7.2% in 2020.
“ADIA sought out opportunities in regions and sub-regions with high potential over the long term and continued to build out its direct exposure to private markets,” the Abu Dhabi-based fund said.
“It also benefited from positioning equity portfolios to capitalise on emerging trends, including opportunities arising from differing government responses to the pandemic.”
ADIA’s long-term portfolio strategy sets exposure to North America at a range of 45% to 60%, to Europe at 15% to 30% and emerging markets at 10% to 20%, it said. By asset class, 32% to 42% was deployed in developed equities.
ADIA’s portfolio by region and asset class https://fingfx.thomsonreuters.com/gfx/mkt/klvygedwlvg/ADIA%20review_2021.png
In terms of restructuring, the fund established a Core Portfolio Department, which it said allows “more efficient, flexible trading and rebalancing”.
It set up a Central Investment Services Department to create “a single point of visibility” for the total portfolio and efficient investment support activities across the organisation.
ADIA said it also boosted front-line managers’ autonomy, part of a wider push to simplify internal systems and improve ability to act quickly on fast-moving opportunities.
As a result, the fund had an overall reduction in headcount, though it did not disclose by how much. The report said ADIA has 1,520 employees.
Sources told Reuters in March that ADIA cut dozens of jobs to save roughly 1 billion dirhams ($270 million) and make the organisation more efficient.
($1 = 3.6729 UAE dirham)
(Reporting by Yousef Saba; Editing by Josie Kao and Lincoln Feast.)
