Abu Dhabi: The Abu Dhabi Investment Authority (Adia), the world’s largest sovereign wealth fund by assets under management, in a review on Monday of its 2012 performance said that up to 42 per cent of its portfolio was invested in developed market equities. The figure marked a cut in its exposure to the developed markets, compared to a year earlier.
In its 2011 performance review, Adia had said that up to 45 per cent of its overall portfolio had been invested in developed market equities.
Adia’s latest figures showed that its deployment of funds in emerging market equities remained at up to 20 per cent, similar to 2011 levels, while up to 5 per cent had been deployed in small cap equities, up to 20 per cent in government bonds, up to 10 per cent in credit, up to 10 per cent in alternative investments, up to 10 per cent in real estate, up to 8 per cent in private equity, up to 5 per cent in infrastructure, while cash comprised up to 10 per cent of its investment portfolio.
“Approximately 75 per cent of Adia’s assets are managed by external fund managers whose activities are subject to careful oversight by internal Adia teams. Approximately 55 per cent of Adia’s assets are invested in index-replicating strategies,” Adia said in its 2012 review.
“In US dollar terms, the 20-year and 30-year annualised rates of return for the Adia portfolio were 7.6 per cent and 8.2 per cent, respectively, as of 31 December, 2012,” it added.
Region wise, Adia said up to 50 per cent of its investments were in North America, up to 35 per cent in Europe, up to 25 per cent in emerging markets and up to 20 per cent in developed Asia.
Earlier this month, Adia hired former Deutsche Bank AG executive John McCarthy as its global head of infrastructure. In January, it appointed Gregory Eckersley as global head of its internal equities department, overseeing portfolios, risk management and the due diligence process.
Colm Lanigan, a former Credit Suisse First Boston banker, was named head of Principal Investments in its private equity unit in October and Marc Keirstead as chief financial officer of private equities department.
About 55 per cent of its assets were invested in indexed strategies, the review said, versus 60 per cent in the 2011 review.
Adia also boosted its allocation to Chinese equities last year after receiving approval from the market regulator under the so-called Qualified Foreign Institutional Investor scheme. The fund boosted its holding to $500 million in the third quarter, up from an earlier limit of $200 million, it said.
It also highlighted the “rapid expansion in the international use of the Chinese Yuan in global trade and financial markets.”
The yuan’s progress towards becoming an international currency “is more rapid than had been expected and should offer more opportunities to global investors in coming years,” Adia said.