Tight-lipped Abu Dhabi wealth fund issues review
Tuesday, September 13, 2011
DUBAI, United Arab Emirates (AP) — The Abu Dhabi Investment Authority issued its yearly statement Tuesday, documenting the investment strategy and holdings of what is considered to be the world’s largest sovereign wealth fund.
ADIA is the biggest of several funds Abu Dhabi uses to manage its oil wealth, controlled by the emirate’s hereditary ruler. Abu Dhabi is the capital of the United Arab Emirates and holder of nearly all the OPEC member’s oil reserves. The federation includes seven semiautonomous city-states and is the world’s third-largest oil exporter.
Most of the fund’s investments are in North America and Europe. ADIA is a major investor in Citigroup Inc. after a cash injection of $7.5 billion in 2007.
Analysts believe ADIA is the world’s largest sovereign wealth fund, with estimates of its size having ranged from less than $400 billion to $875 billion and beyond.
Despite attempts at increased openness by the tight-lipped fund, the 50-page report called “2010 Review” does not contain highly sought-after information, such as balance sheet details or the overall size of the fund.
The document provided only limited details on the fund’s performance, listing annualized returns over the past two to three decades.
In the report’s introduction letter, the fund’s managing director, Sheik Hamed bin Zayed Al Nahyan, said “ADIA continued to benefit during 2010 from its decision a year earlier to tilt exposures in the portfolio towards asset classes and regions able to benefit from better growth prospects.”
“This is an approach that remains in place as we enter 2011,” Sheik Hamed said.
He added that the global economy “remains subject to large current account imbalances” as governments fight recession, face large debt increases and “significant challenges in meeting long-term costs associated with aging populations.”
Sheik Hamed was appointed ADIA’s head last year after his predecessor and brother, Sheik Ahmed bin Zayed Al Nahyan, died in a glider crash in Morocco.
Although the fund’s managing director is responsible for ADIA’s daily operations, ultimate oversight and investment strategy rests with Abu Dhabi ruler Sheik Khalifa bin Zayed Al Nahyan, who is also the president of the Persian Gulf federation, which includes Dubai.
Actual investments are largely chosen by professional money managers.
Stocks and other equities in the U.S. and Europe make up the largest class of ADIA’s assets, comprising 35 to 45 percent of the fund’s holdings.
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