Wafra (Arabic for “abundance”, and the southernmost area in Kuwait) was established by the PIFSS over three decades ago and today invests on behalf of PIFSS and asset owners around the world. In 2018, it rocketed to new heights with the launch of Capital Constellation, an innovative JV among leading institutional asset owners across Europe, North America, and the Middle East. We had the immense pleasure of catching up with Daniel Adamson, SMD of Wafra Inc. and President of Capital Constellation.
[GSWF] What is the relationship between the PIFSS, Wafra Inc. and Capital Constellation?
[WCC] PIFSS is 100% owner of Wafra and an equal partner in Capital Constellation, along with Alaska PFC, Railpen and NYSCRF. Wafra is tasked with the execution of the investment strategy and the expansion of Constellation but ownership, strategy and governance sits with the asset owners, governed by a simple and effective governance structure at Board level (“one organization, one vote”).
[GSWF] Wafra Inc. has come a long way since it was established as WIAG in 1985. Are you still growing your capital base?
[WCC] Wafra is a global, diversified US$ 28 billion AuM asset manager with a focus on complex alternative transactions. As guardians of generational capital, we are both an asset owner and an asset manager but not an asset aggregator. Where we believe additional capital will better position us as a preferred partner, we have and will continue to work on behalf of like-minded investors.
[GSWF] What is the current investment focus of Wafra Inc. in terms of asset classes, geographies and/or industries?
[WCC] We are predominantly focused on US, Europe, and Asia, with investments spanning real assets, private equity / venture capital, alternative finance, liquid markets and, of course, strategic partnerships including investments in 23 leading asset managers.
[GSWF] You are putting a lot of effort in ESG, including memberships to UNPRI and SASB. What are your ambitions?
[WCC] Our Sustainable Investment Group has helped us to establish a future-forward position on ESG in private capital, with a cascade effect as a model and resource for our 23 strategic partner GPs, some of whom are still building their own ESG programs to scale.
[GSWF] What is the business proposition of Capital Constellation and its added value, compared to other platforms?
[WCC] Constellation is a novel departure from traditional asset managers that intermediate capital from the underlying assets. December saw us close on the 13th transaction, which suggests that the vision is coming to fruition. That vision is of an ecosystem of top quality asset owners working in an aligned way with 30 or 40 GP partners, using a tech-enabled system to connect buyers and sellers within the ecosystem. While Wafra provides the gravity to hold it together, Constellation shines because of its collection of stars.
[GSWF] We understand that the formation of Capital Constellation was not easy – what were the main challenges?
[WCC] The main challenge was that nobody had built this kind of platform to serve SWFs and PPFs – and it really took a lot of effort from their dedicated staff. The fact that we have just welcomed NYSCRF and OCERS means that the hard work has been worth it.
[GSWF] CC has committed to 13 different funds in the US and Europe. What other products are you currently looking at?
[WCC] The Constellation strategy now has 13 GP partner firms with a wide range of products, including Industrials, Renewables, Telecom, Healthcare, FinTech, Financials and Credit. Our orientation is towards specialists and new economy sectors where we believe our asset owners will have an increasing appetite in the decade ahead and where we can solve shared objectives together.
[GSWF] Of Wafra’s 200 staff, over 30 of them wear a double hat – does it get confusing?
[WCC] We are a significant advance on the archetypical 20th-century organizational model – as a virtual conglomerate, with Wafra serving as the engine to propel the platform forward and the primary talent pool from which expertise is drawn for execution. Our “One Wafra” approach means our team works outside of silos and ensures that we can pull the right talent to suit the investment opportunity. We think that this approach aligns well with a total portfolio approach.
[GSWF] Personally, you are also very invested in both initiatives – what do you enjoy the most?
[WCC] We have partners from Juneau to Kuwait City, Stockholm to California, and New York to London. I truly look forward to meeting in person again and I am incredibly grateful for the opportunity I have been given to be a partner to all of these great organizations.