This year saw Global SWF publish 250 daily articles on the latest developments in the sovereign wealth universe at a time of rising geopolitical tensions, economic slowdown and high inflation.
Over the past year, our LinkedIn following has surged 88% to more than 12,000, most of whom hold senior positions: 6% are C-suite, 7% are partners or owners, 20% are at V-P level, and 29% are in senior management. Our readership is geographically diverse, with the top five locations being London, New York, Singapore, Hong Kong, and Mumbai, indicating the growing importance of Asia – and the reason why Global SWF relocated its base to Singapore this year to develop connections with Asian asset owners and managers, while retaining a presence in New York and London. Nearly 40% of our readership are employed by corporations with a workforce of more than 5,000, mostly in investment management, financial services and banking.
We highlight the three most popular themes of interest to our readers that will be expanded in our forthcoming 2024 Annual Report, which will be released on 1 January.
UAE’s SWF Universe and Shifting Political Dynamics
Our most popular articles concerned the operations of Gulf funds and their relationship with ruling families and domestic political developments. Readers were particularly excited by our article on Sheikh Mohamed’s – popularly known as MbZ – changes in leadership at Abu Dhabi’s two main sovereign wealth funds, ADIA and Mubadala. MbZ stepped down of both councils, giving the chairmanship of ADIA to his full brother Sheikh Tahnoon; and Mubadala’s, to his full brother Sheikh Mansour. Both the men now have significant economic and political clout with leadership of an array of private and state investors. The changes highlighted the shifting political dynamic within the Abu Dhabi ruling family and the blurring of lines between private gamily offices and the state. The blurring of lines was the subject of another article that drew considerable attention was the consolidation of the property and events assets of ADQ and IHC Capital, which is linked to the ruling family, into Q Holdings Inc to create a regional leader in the real estate and hospitality sector.
On the theme of the UAE’s multi-trillion sovereign wealth industry, we also reported on the shake-up of the board of directors of the federal-level SWF, the EIA, and the formation of a new Ministry of Investment to develop the UAE’s investment strategy both globally and domestically as it contends with growing economic competition from neighbors. CEO of ADQ Mohamed Al Suwaidi was appointed to head the ministry, in addition to his leadership of federal and Abu Dhabi enterprises and the Abu Dhabi Pension Fund.
Financial Reporting: Lifting the Lid on the Performance of Opaque Funds
Comparing and contrasting the performance of funds was a major focus of reader interest, with our compilation and calculation of fund performance across the universe of sovereign wealth and public pension funds. We will present our 10-year annualized returns of state-owned investors in our 2024 Annual Report, but we have also calculated nominal annual returns for some of the most opaque funds, which keep AUM and performance a closely guarded secret.
Our coverage of PIF’s 2022 annual report drew the most interest, as we used our proprietary in-house modelling to determine that – like the rest of the sovereign investor universe – the fund’s return was negative, at -6.5%; a figure the fund buried in a five-year rolling return.
We have made similar annual returns calculations for GIC and ADIA, which also only report multi-year averages, in order to establish the best performers and the role of asset allocation strategies in short-term and long-term returns. In the case of ADIA, we showed that despite a plunging return on its highly liquid portfolio (about three quarters of its portfolio in bonds and stocks) that we calculated at -16.4%, it still beat its benchmarks. We estimated that by end-2022 its AuM was US$892 billion, which would have increased to US$940 billion by end-September 2023; our end-2023 estimates will be in our 2024 Annual Report.
We also calculated GIC’s annual return and AUM based on our extensive dataset and modelling, including inflows and outflows – data that the SWF does not release due to national security sensitivities. We found that GIC’s single year nominal return in the financial year to end-March 2023, was -8.1%, which was worse than Temasek’s and that of any other fund closing the year at that date, primarily because of the weight of GIC in bonds and stocks, which had an awful year, and the 2% variation in the SGDUSD exchange. We estimated its AUM was US$769 billion – helped by a transfer of US$144 billion from the Monetary Authority of Singapore.
Private Debt: Most Followed Asset Class
Although private debt is not the biggest slice of sovereign investor portfolios, it was the asset class that drew the most attention – and one that will feature prominently in our 2024 Annual Report. Again, our readership was most drawn to Abu Dhabi’s suite of funds as ADIA and Mubadala aggressively pushed into the asset class. The most popular article on the asset class concerned ADIA’s US$932 million investment in Australian real estate private credit company Qualitas Diversified Credit Investments (QDCI). The move demonstrates ADIA’s interest in advancing in the private credit market as the banking sector retreats from the sector, leading to reduced competition and higher margins.
Mubadala was also a star performer in the asset class, ramping up activity and fuelling interest from our readers. The most popular article on the fund’s credit strategy also concerned real estate debt, reporting on the anchoring of a new European special situations fund, Starz Orion Capital, which has been launched by Starz Real Estate (Starz). Mubadala is one of the most aggressive investors in private credit, both through partnerships and through the purchase of equity stakes in asset managers and the forging of billion dollar plus alliances with private equity firms to advance debt strategies.
Canadian PPFs gained readers attention as they advance in the asset class. We reported on a range of Canadian deals in the sector, including: OMERS’s separately managed account that will invest in private credit opportunities across the Asia-Pacific region and BCI joining with ADIA and Centerbridge to back a US$5 billion private credit fund launched by Wells Fargo. Australia’s Future Fund also generated a big response from our readers, who enjoyed our analysis of its strategic tilting to private credit, bumping up investments by A$2.8 billion to take advantage of rising global interest rates and doubling its exposure to domestic corporate debt.
