Responsible investing for the long-term has paid off for the Abu Dhabi Investment Authority (Adia), which has out-performed its benchmark targets for returns and helped secure the future of the emirate.
By diversifying its holdings and investing for the long-term, the fund has been able to ride out the present turmoil in international markets and take up the investment opportunities that have presented themselves even in these difficult times.
In a rare interview, Adia Managing Director Shaikh Ahmad Bin Zayed Al Nahyan set out the investment strategy of the sovereign wealth fund and his views of the state of the global economy. Shaikh Ahmad's assessment of the international economy is important as Adia is widely regarded as the largest sovereign wealth fund in the world, with the power to move markets and determine the fortunes of global corporations.
His openness about the aims and objectives of the fund is extremely important at a time when international investors are placing a premium on transparency, as the failure of opaque structures and institutions continues to undermine their confidence in the global financial system. He also dismissed concerns that sovereign wealth funds are an international political tool of governments by underlining that they are driven solely by financial and economic considerations.
Despite signs that the global economy may be recovering, Shaikh Ahmad remains concerned about high unemployment, high government deficits and increased protectionism. He correctly points out that restrictions on cross-border investment would hinder the global economic growth that has improved living standards across the globe. However, this does not mean that effective regulation of markets is not needed to curb the excesses that brought about the international financial crisis.
It is clear that Adia will remain a growing asset for Abu Dhabi and a symbol of the strength of the UAE, beyond the present financial crisis and well into the future.