Abu Dhabi Investment Authority (Adia), the UAE‘s largest sovereign wealth fund with $700 billion (Dh2.57 trillion) assets, is recruiting for a number of positions as it plans to increase active investments in fixed-income in the coming years.
“During 2019, as part of its transition towards increased active management, the Fixed Income & Treasury Department plans to add a number of new positions, mostly within investment and research-focused roles,” the sovereign wealth said in its 2018 annual report.
Adia has been increasingly focusing on managing funds internally as 55 per cent of its portfolio is now managed by external managers, down from 60 per cent three years ago.
It currently has 1,700 employees, representing more than 65 nationalities. The European nationals account for the largest workforce at 29 per cent followed by 28 per cent Emiratis, 21 per cent Asians, 12 per cent Americas, seven per cent Middle Eastern and African nationals and three per cent from Australasia.
Abu Dhabi Investment Authority was the third largest sovereign wealth fund in May, managing around $696.66 billion assets in May 2019. Norway’s Government Pension Fund was the largest with $1.072 trillion assets under management followed by China Investment Corporation at $941.42 billion, according to Statista.
Sheikh Hamed bin Zayed Al Nahyan, managing director of Adia, said the world economy may not be strong, and valuations of many assets are now at cyclical highs, but the financial system is more robust than it was 10 years ago.
“Looking ahead, it appears likely that global growth will remain stable for the foreseeable future, although contributions will be spread unequally between countries. Demographic trends continue to favour emerging over developed economies, with India and China in particular expected to remain important engines of growth. We will continue to seek opportunities to invest in these higher growth markets,” Sheikh Hamed said.
Thanks to its highly diversified portfolio, the sovereign wealth fund said it has been able to withstand the ups and downs of markets over many years to produce sustainable, long-term returns for the benefit of Abu Dhabi.
Adia’s 20-year annual rate of return fell from 6.5 per cent in 2017 to 5.4 per cent while 30-year annualized rate of return declined from 7.0 per cent to 6.5 per cent year-on-year.
It said credit markets may come under growing pressure in 2019 against an increasingly complex geopolitical backdrop. There are also concerns that valuations remain too high given deteriorating fundamentals and liquidity conditions.
Among other initiatives in 2019, Adia’s Internal Equities Department will explore the possibility of creating sub mandates within some regional and country portfolios to capture specific opportunities.
The sovereign wealth fund is confident about long-term prospects of emerging equity markets – especially China and India – versus developed world.
With regard to outlook for the global real estate sector, the sovereign wealth fund believes that fundamentals remain well-supported, as the weight of capital seeking quality investment returns continued to grow.
“However, yields are likely to remain under pressure across the sector with resulting implications for our investment strategy,” it said in 2018 annual report.
The fund will remain focus on emerging markets’ real estate sector. “We expect demand in both developed and emerging markets to remain strong for industrial assets, including logistics.”