Abu Dhabi Investment Authority to boost PE exposure

The newspaper added that ADIA is in talks with some of the world's largest private equity firms on raising allocations to the asset class. Infrastructure is another area likely to see more investment.

ADIA started investing in private equity in 1989. According to its latest portfolio review, 2-8% of total assets are in private equity - which means $12.5-50 billion, based on the Sovereign Wealth Fund Institute's estimate that ADIA is worth $627 billion.

The fund appointed James Kester as CIO for private equities in November 2010, replacing George Sudarskis, who had held the role for 10 years. Kester joined from Zurich Alternative Asset Management, where he was head of private equity, and previously worked at Allianz Private Equity Partners (APEP) and KPMG.

ADIA's move to raise private equity allocations reflects a broader trend among sovereign wealth funds. Those that have currencies pegged against the US dollar are effectively losing money due to relatively strong inflation and low returns on Treasury yields.

China Investment Corp's (CIC) exposure to alternative investments - such as private equity, hedge funds, real estate and infrastructure - increased sharply t0 21% in 2010 from 6% a year earlier. Qatar Investment Authority (QIA), among the most aggressive of sovereign funds, raised its private equity allocation by $19 billion in 2010, a source familiar with the matter told The Al Arabiya News.

ADIA delivered returns of 7.6% on an annualized basis over a 20-year period, as of December 31.

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• Topics
• MENA
• LPs
• CIC
• QIA
• Abu Dhabi Investment Authority (ADIA)