Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Defined Contribution East
    • 2023 ESG Investing
Breadcrumb
  1. Home
  2. Sovereign Wealth Funds
December 08, 2020 12:35 PM

ADIA looks to Africa for new investment opportunities

Sophie Baker
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Residential and commercial skyscrapers stand along the coastline in Abu Dhabi, United Arab Emirates
    Bloomberg
    Skyscrapers along Abu Dhabi's coastline

    Abu Dhabi Investment Authority, Abu Dhabi, is exploring opportunities for investment in Africa and continues to view China and India as key drivers of global growth.

    The sovereign wealth fund's 2019 review, published Tuesday, highlighted among its key developments that it hosted an Africa Investment Summit "to explore opportunities on the continent for long-term focused investors."

    In a letter published as part of the review, Hamed bin Zayed Al Nahyan, managing director, said: "With an abundance of natural resources and young, growing and increasingly educated populations, African countries are among those offering the greatest potential for long-term investors."

    He highlighted that investment in Africa "comes with many challenges, which must be carefully weighed. However, we are monitoring developments closely and increasing our dialogue with potential local partners, with a view to accessing appropriate opportunities on the continent."

    Mr. bin Zayed Al Nahyan added that, on a geographic basis, fund executives "continue to see China and India as key drivers of global growth in the years to come, although we recognize the importance of remaining open-minded about possible new sources of return."

    The fund's 20-year annualized rate of return at Dec. 31 was 4.8%, vs. 5.4% in 2018. The 30-year annualized rate of return was 6.6% as of Dec. 31, vs. 6.5% last year. "The 20-year rate of return in particular was negatively impacted by the exclusion from the rolling average of strong gains in the late 1990s," the review said.

    ADIA's long-term strategy portfolio remained unchanged vs. last year, with a 32% to 42% allocation to developed equities, 10% to 20% allocations each to emerging markets equities and to government bonds, 5% to 10% exposures each to credit, alternatives and real estate, a 2% to 8% allocation to private equity, 1% to 5% exposures each to small-cap equities and infrastructure, and a zero to 10% allocation to cash.

    The fund is 55% actively managed, while 45% of assets are run internally — both unchanged from last year.

    By region, the long-term strategy portfolio had a 35% to 50% exposure to North America, 20% to 35% to Europe, 15% to 25% to emerging markets and 10% to 20% to developed Asia. Allocations were unchanged from 2018.

    For its outlook, ADIA said the long-term implications of the COVID-19 outbreak remain unclear, although the financial system is more robust than in 2008's global financial crisis "and more able to withstand a global slowdown."

    The fund's external equities department "is planning to add Mexico to its group of single country mandates and has identified a reputable manager to lead its efforts in capturing local opportunities," the review said. The department will also fund a new strategy targeting "modestly lower expected excess returns over time, with lower risk — an approach aimed at further enhancing (the department's) ability to generate consistent long-term dollar alpha for the total ADIA portfolio," the review said.

    In real estate, executives will continue to focus on emerging markets in the coming years, particularly China, India and Latin America. "The growing consumer class in these markets, combined with a scarcity of quality space across sub-sectors, is likely to provide a range of attractive opportunities," the review said.

    Mr. bin Zayed Al Nahyan added in his letter that, looking ahead, "advances in technology are likely to bring the greatest changes to the investment industry in the decade to come. The recent evolution in computational power has enabled machine learning techniques to tackle new problems of increased complexity, and this knowledge is now widely accessible through open source platforms."

    This impacts on investors in many ways, including that investee companies "are at risk of obsolescence if they do not adapt to this new reality," he said.

    ADIA has an estimated $579 billion in assets, according to Fitch Ratings.

    Related Articles
    Abu Dhabi Investment Authority turns passive for Japanese portfolio
    Pandemic could hit some Middle East funds even harder
    Abu Dhabi shelves sale of $2 billion private equity book over coronavirus
    Recommended for You
    australia_dollar_coins_50_dollar_notes_1550-main_i.jpg
    Australia's Future Fund posts 3.7% loss for 2022
    Nicolai_Tangen_i.jpg
    Norwegian wealth fund returns -14.1% in 2022 amid 'year for the history books'
    nicolai_tangen_750-main_0.jpg
    Corporate greed 'gone too far,' Norwegian wealth fund CEO says
    The Institutional Investor's Guide to ESG Investing
    Sponsored Content: The Institutional Investor's Guide to ESG Investing

    Reader Poll

    January 25, 2023
    SEE MORE POLLS >
    Sponsored
    White Papers
    Show Me the Income: Discovering plan sponsor and participant preferences for cr…
    Morningstar Indexes' Annual ESG Risk/Return Analysis
    The Future of Infrastructure: Building a Better Tomorrow
    Outlook 2023: Opportunity in a volatile world
    Research for Institutional Money Management
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Defined Contribution East
      • 2023 ESG Investing