Abu Dhabi investment strategy stays same despite oil price drop

04 June 2015

Long term view has enabled Adia to navigate through challenging markets

Abu Dhabi’s sovereign wealth fund the Abu Dhabi Investment Authority (Adia) has reiterated its long term investment strategy in its review for 2014.

Hamed bin Zayed al-Nahyan, managing director, Adia wrote in his letter with the review that: “…balancing the pressing demands of today with carefully planned sustainable strategies for the future which has allowed Adia to navigate a steady course through often challenging markets in the four decades since our creation. Whether it is a global financial crisis, as seen in 2008, or a steep decline in energy prices as witness last year, our mission remains the same as do the principles that guide it.”

The fall in oil prices over the past year had led to some calls in Abu Dhabi for investment vehicles like Adia to invest in its domestic market to drive economic growth.

Adia, which operates independently from the Abu Dhabi government, says it does not invest in in the UAE as a matter of practice. Instead its long-term investments are overseas. The largest percentage of its exposure is in North America where is says it holds a minimum of 35 per cent and a maximum of 50 per cent of its assets.

For asset class, the largest exposure is in developed equities where it holds a minimum of 32 per cent and a maximum of 42 per cent of its portfolio, reflecting the fund’s cautious long term approach.

For returns there was a marginal increase in annualised returns in 2014 to 8.4 per cent per annum over 30 years on 31 December 2014, up from 8.3 per cent on 31 December 2013. The annualised 20 year returns were 7.4 per cent on 31 December 2014 and 7.2 per cent on 31 December 2013.

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