Abu Dhabi Investment Authority Increased Infrastructure and PE Weights
Posted on 09/08/2021
The Abu Dhabi Investment Authority (ADIA) released its 2020 annual review. Two major changes in the sovereign wealth fund’s long-term asset allocation included increasing ranges in some alternative asset classes. This was the first long-term asset allocation change in over a decade. ADIA’s long-term private equity allocation went from a range of 2% – 8% to 5% – 10%. Infrastructure went from a range of 1% – 5% to 2% to 7%. ADIA struggled in its real estate portfolios, while betting on more private equity funds and infrastructure investments, both public and private.
ADIA continued to expand exposure to insurance-linked securities (ILS).
Geographic exposure to Developed Asia changed from a maximum of 20% to a maximum of 15%.
Equities
ADIA invests in public equities through two departments: the Indexed Funds Department (IFD) and the Equities Department (EQD). In 2020, the indexed group launched a climate change portfolio in the first quarter of 2020, based on a framework that systematically integrates the opportunities and risks associated with the transition to a lower carbon economy. Furthermore, ADIA’s Equities Department was created in 2020 by merging two previously separate departments – one overseeing the activities of external managers, the other managing multiple internal portfolios – to provide a total portfolio perspective for ADIA’s active equity exposures, according to the annual review. In 2020, many sovereign investors bought the dip, increased exposure to developed market equities such as the United States. For the time being, ADIA continues to expand its U.S. equities investing in active management, as strong sales growth and record margin expansions keep occurring in American markets. Non-Asian sovereign funds are also a bit cautious on their Chinese equity holdings, as China exerted government regulatory actions on industries such as finance and technology.
| Calendar Year – Dec 31 | 20-Year Return – Annualized Returns – USD |
|---|---|
| Dec 2020 | 6.0% |
| Dec 2019 | 4.8% |
| Dec 2018 | 5.4% |
| Dec 2017 | 6.5% |
| Dec 2016 | 6.2% |
| Dec 2015 | 6.5% |
| Dec 2014 | 7.4% |
| Dec 2013 | 7.2% |
| Dec 2012 | 7.6% |
| Dec 2011 | 6.9% |
| Dec 2010 | 7.6% |
| Dec 2009 | 6.5% |
| Dec 2008 | 6.1% |