The Abu Dhabi Investment Authority headquarters.

The Abu Dhabi Investment Authority’s (Adia) assets managed internally have increased from 55 per cent in 2022 to 64 per cent in 2023. According to the sovereign wealth fund’s 2023 Adia Review, the MSCI World Index experienced a 24 per cent rise in 2023, with the majority of these gains occurring in the final months of the year as risk appetite surged. Meanwhile, fixed-income markets mirrored the performance of equities, rising towards the end of the year as investors anticipated interest rate cuts. “It was a more complex scenario for private assets as high interest rates impacted deal economics,” the report noted. Adia stated it was well-placed to capitalize on the robust gains in certain segments of these markets, while also benefiting from market dislocations in areas facing more challenging conditions.

In recent years, Adia has focused on achieving total returns at a portfolio level, differing from the conventional approach of aiming for individual asset classes to outperform benchmarks. The 2023 Adia Review provides an in-depth analysis of market conditions across various asset classes in which the authority invests, along with significant developments within each investment department. In private equity, Adia has utilized its long-standing relationships in the sector to expand and enhance its access to the sector, ultimately boosting returns. In 2023, Adia’s allocation to private equity increased to 12 per cent-17 per cent of its total portfolio, up from 10 per cent-15 per cent in 2022.

Adia believes that several global transitions—technological, economic, and energy-related, among others—are currently in progress. The authority has positioned itself to engage with and capitalize on the opportunities arising from these evolving trends in multiple ways. As of 31st December 2023, Adia’s 20-year and 30-year annualized rates of return, on a point-to-point basis, were 6.4 per cent and 6.8 per cent respectively, compared to 7.1 per cent and 7.0 per cent in 2022.

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