Dubai: Abu Dhabi Investment Authority (ADIA), the UAE’s biggest sovereign wealth fund achieved stronger rates of return despite the COVID-19 crisis impacting the global economy according to its 2020 annual review.
While the COVID crisis impacted all aspects of life across the world, ADIA said it remained focused on its mission.
Throughout the crisis, ADIA remained focused on its mission of prudently managing capital on behalf of Abu Dhabi. To do so, it was necessary for ADIA to react on several fronts.
Asset allocation
ADIA’s investments in private equity and Infrastructure have grown over a number of years and this has led to increases in the allocation bands for both asset classes:
- Private equity has increased from 2 per cent - 8 per cent band to 5 per cent – 10 per cent band
- Infrastructure has increased from 1 per cent – 5 per cent range to 2 per cent –7 per cent
- On a geographical basis, the band for Developed Asia has reduced from 10 per cent –20 per cent to 5 per cent – 15 per cent
“This trade-off is at the centre of ADIA’s investment strategy, and we were able to efficiently navigate market turmoil to position ourselves for the rebound,” Sheikh Hamed said
Areas of focus
Major areas of investment focus for the fund include technology, healthcare, renewable energy, and real estate sub-sectors such as logistics and data centres.
ADIA increased its exposure to renewable energy and through its infrastructure investments it now has an indirect interest in assets with a renewable capacity of more than 20 gigawatts.
On the equities side, its Indexed Fund Department introduced a climate change portfolio last year.
The Fund attributed these increases to both the years falling out of the calculations as well as performance in 2020, underlining our preference for focusing on long term trends. ADIA also took the opportunity in 2020 to update certain ranges within its long term strategy portfolio, reflecting changes that have been underway for some time.
