Abu Dhabi Investment Authority (ADIA)

Abu Dhabi Investment Authority (ADIA)is one of the major state funds in the world which totally belongs to the government of Abu-Dhabi. The Fund was established in 1976 and for the whole period of its existence it has strong reputation in the world markets.

The main goal of ADIA is to invest sources on behalf of the government of emirate Abu-Dhabi and to grant necessary financial resources for ensuring safety and maintenance of future well-being of the emirate.

In accordance with impartial evaluators the price of the ADIA Fund’s assets makes up to USD 400 – 875 billion.

Assets composition and placement in the world. In theNorth America the Fund makes investments from 35% up to 50% of its sources, in European countries – from 25% to 35%, in developed Asian countries – from 10% to 20%, in developing countries of the world – from 15% to 25%.

Depending on the criterion of the level of the development of a country, the Fund invests from 35% – 45% of its financial resources into shares of the companies of the developed countries and from 10% to 20% – into shares of the companies of the developing countries.

Turning to financial instruments, the Fund invests from 10% to 20% of its assets into state bonds, from 5% to 10% – into hedge – funds, from 5% to 10% – into real estate, from 2% to 8% – into companies which do not trade at the stock exchange, from 1% to 5% – into low capitalization companies. Up to 10% of its assets ADIA prefers to keep in cash.

There are two mail resources of the Fund – incomes of Abu Dhabi National Oil Company (ADNOC) and allocations of the state budget surplus. In case of budget deficit the government of the emirate can use sources of the Fund.

Like the majority of institution investors, the Fund keeps conservative strategy of making investments and attentively researches and analyzes changes of the main world stock market indexes, such as S&P 500.

Owing to such strategy the Fund keeps showing positive results of its investments for along time. In accordance with data of the investment fund for the last 20 years an average annual profitability of ADIA investments made up to 6,5% and for the last 30 years (as for the end of 2009) it appeared to be even more – up to 8%.

ADIA’s staff consists of high-class professionals. About 80% of the decisions on making investments are made by external managers who concentrated the major part of the investments. From 1200 ADIA’s employees 31% are nationals of the UAE, 36 %– of Asia countries, 11% – of the Middle East and Africa states, 12% – of European countries, 8% – from America and 2% – from Australia and New Zealand. Nationals of  more that 40 States work in the Headquarters in Abu-Dhabi. In 2010 the turnover of workers was no more than 7%.

ADIA does not strive for active participation in the management of the companies in which it makes investments. ADIA’s governors make sure that they do not aim to reach any political interests and their decisions are stipulated only by economic reasons.

ADIA has well-established standards of management invented during many years to ensure strict accountability and control.

Members of the Board of Directors, its Head and Financial Director are appointed by the Head of the emirate in the latter’s decree. The Board is responsible for realization of ADIA’s strategy in accordance with the Abu-Dhabi’s legislation. Also it supervises financial indicators and managerial activity. The Board may not intrude into the process of making investments decision which are subjected to the Managing Director legal responsibility.

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