Adia: Managing a diverse range of investments

Abu Dhabi: Abu Dhabi Investment Authority's (Adia) investment departments are responsible for designing and managing investment portfolios within the parameters set for them through the asset allocation process. These departments, which between them invest across multiple asset classes and geographies, have sole discretion over the origination and recommendation of investment proposals.

External Equities

This is a general term used to describe the activities of investing departments responsible for appointing and monitoring external fund managers investing in different regions. These include: the Americas, Europe, Far East and emerging markets. Each department is divided into both active and passively managed mandates. In total, Adia operates more than 60 external equity mandates, which follow an agreed strategy that adheres strictly to Adia's specified investment guidelines.

Internal Equities

The Internal Equities Department invests directly into global equity markets, rather than through external fund managers. The department was created in early 2008 to bring all of Adia's regionally-focused fund managers onto a common platform, as a means of enhancing co-ordination and promoting internal debate about global market events and trends. Internal Equities is divided primarily between active portfolios, and passive and quant portfolios. There are seven active regional teams, each with a portfolio manager and analysts, as well as sector specialists in some cases. Passive & Quant is divided into two regional teams - Developed Markets and Emerging Markets.

Fixed Income & Treasury

The Treasury Department serves multiple functions, which include managing Adia's liquidity needs and cash investments in the short-term money markets, as well as managing its portfolio of investments across a range of fixed-income securities. The department manages funds both internally and through external managers and is assisted by support departments, including a department that executes its trades. In addition to money markets, the Dep-artment's investments can be grouped into four broad categories: global government bonds, global inflation-linked bonds, emerging market bonds and global investment-grade credit.

Infrastructure

The Infrastructure Group was created in 2007, to build and manage a global portfolio of infrastructure investments, which are attractive to long-term investors due to their relatively stable returns. The group's core focus is on assets with strong market-leading positions and relatively stable cash flows, including utilities such as water, gas and electricity distribution and transmission companies, as well as transport infrastructure, such as toll roads, ports, airports and freight railroads. In keeping with Adia's overall approach, the Infrastructure Group is a financial investor and does not seek to control or operate the assets in which it invests.

Private equities

The Private Equities Department is responsible for investing in global private equity funds and assessing selected opportunities to co-invest alongside external funds. Adia began investing in private equity as early as 1989, to diversify its portfolio and seek risk-adjusted returns that exceed those possible in the public equity markets. The Department has four main divisions, focusing on investments in primary funds, secondary and distressed funds and carefully selected co-investments alongside external managers.

Real estate

The Real Estate Department is responsible for building and managing a diversified portfolio of global real estate assets, both through direct investments and the use of external funds. The Department divides its activities into regional teams, each with its own investment managers and analysts, and a separate, globally-focused hospitality team. Together, their primary focus is to invest directly in assets with stable cash flows, through joint ventures with experienced local partners or through external managers who are closely directed by Adia's in-house team.

Alternative investments

The Alternative Investments Department invests in externally-managed futures and hedge funds, while also operating an internal team that invests directly in futures markets. The Department's goal is to generate long-term capital appreciation with low correlation to traditional global equity and fixed income markets. Its team of investment professionals is responsible for identifying and assessing external managers across a pool of approved strategies and asset types. Adia's portfolio of hedge fund investments is broadly diversified across macro, relative-value, event-driven and market-neutral equity strategies. In managed futures, the portfolio is spread across multiple strategies.

— Source: Adia