On Tuesday, ADIA finally released its 2022 Annual Report, shedding some light on its latest developments:

Results:

  • ADIA is a fairly liquid investor, with about three quarters of its portfolio in bonds and stocks, so 2022 was naturally a bad year.

  • The 20y and 30y rolling returns dropped to 7.1% and 7.0% (from 7.3% and 7.3% last year), indicating that 2022 was worse than both 2002 and 1992.

  • According to our internal model, the 2022 annual return would have been -16.4%, slightly better than its benchmarks and than some of its peers.

  • This fall was cushioned by the injection of capital coming from oil revenues, which we estimate in US$ 61 billion for calendar year 2022.

  • The resulting AuM was US$ 892 billion as of December 31, 2022, which would have increased to US$ 940 billion as of September 30, 2023. 

Portfolio:

  • The most significant change in the LT asset allocation is a further increase in Private Equity, including Private Credit, to over 12% of the portfolio.

  • This compares to 5% in 2019, i.e., a growth from a US$ 39 billion to a US$ 111 billion portfolio in three years, becoming one of the world’s largest PE investors together with CPP and GIC.

  • Similarly to its Abu Dhabi peers Mubadala and ADQ, there is appetite for more Private Credit, as signaled this year so far by the investments in QDCI, Barclays-AGL, Wells Fargo, Jefferies and Kotak.

  • The regional allocation bands have stayed the same, with North America at 54% of the total, but there is appetite for Chinese equities, PE (healthcare) and RE (data centers).

  • The portfolio is still 58% active / 42% passive, while internal management has slightly increased to 55% of the total, in line with the growth of PE front-office teams. 

Operations:

  • The Board of Directors announced on March 9 is now confirmed, but Sheikh Khaled is now placed right next to Sheikh Tahnoun, indicating a more prominent role.

  • More importantly, the Real Estate and Infrastructure departments have been spun-off and their EDs are no longer part of the Investment Committee.

  • The "Q team” has grown to over 70 experts (including 8 “Global Heads”) and has been part of a broader effort of identifying and accessing overall investment trends.

  • Headcount continues to shrink: 1,380 staff, almost 400 less people than in 2016. Less back-office (which has consolidated into CPD / CISD) and leaner teams. 

  • Highest figure of Emiratis in 15 years (35% of the total), thanks to young recruits and permanence. Lowest figure ever of Asians, Africans and Middle Easterns, excluding UAE nationals.

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