ADIA recognizes investment opportunities in climate change, data centers

By Rahul Vaimal, Associate Editor
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Abu Dhabi
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In its 2019 annual review, the Abu Dhabi Investment Authority (ADIA), the largest sovereign wealth fund in the United Arab Emirates, said that it saw climate change and data centers as investment opportunities.

ADIA further added that China and India will be the key drivers of global economic growth in the coming years.

ADIA, which manages capital on behalf of the oil-rich government of Abu Dhabi, does not reveal the value of its assets, but Global SWF, a financial consulting boutique specializing in sovereign funds, has put them at $710 billion this year.

ADIA achieved annualized 20-year and 30-year return rates of 4.8 percent and 6.6 percent respectively in 2019, compared to 5.4 percent and 6.5 percent in 2018, it said in the latest report.

“At ADIA, we view climate change as an opportunity. We already routinely incorporate climate change considerations into all of our investment proposals, and have been steadily expanding our exposure to renewable energy. On a geographic basis, we continue to see China and India as key drivers of global growth in the years to come,” Managing Director Hamed bin Zayed al-Nahyan said in the report.

He added that the African countries are among those offering the greatest potential for long-term investors.

ADIA employed 1,700 people at the end of 2019. Its portfolio was split between active and passive management with a 55 percent-45 percent ratio. It managed 45 percent of its investment portfolio internally and 55 percent through external managers, it said.

ADIA said it planned to continue to focus on real estate in emerging markets like China, India and Latin America, where a growing consumer class could provide attractive investment opportunities. It said its external equities department had identified a manager to chase opportunities in Mexico.

Against the backdrop of the COVID-19 pandemic, in the first few months of 2020, ADIA’s private equity department provided expansion capital to new and existing portfolio companies in financial services and invested in the software and industrial services sectors. Other areas of focus included healthcare and technology, it said.

As of the end of last year the renewable energy portfolio of ADIA accounted for over 15 gigawatts of power generation capacity, the report said.