Abu Dhabi’s $1 Trillion Fund Revamps Strategy to Accelerate Global Investments

ADIA shifts focus to data science and private equity for better investment growth

Abu Dhabi's $1 trillion Wealth Fund Changes Investment Strategy to Invest Faster and Smarter Now, the Abu Dhabi Investment Authority (ADIA) will begin utilizing data science to accelerate its decision-making and improve returns.

ADIA is tapping into a 125-person team of data scientists that guide its in-house investing. This makes it easy for the fund to make quicker decisions at a time when markets are moving at a faster pace. One area where it is increasing investments is private credit and private equity.

The fund is now investing in a much broader universe of hedge funds than was ever the case, including long-only bets and purely quantitative strategies. The moves come as ADIA repositions itself away from traditional investments in bonds or real estate and toward markets that require faster execution.

These developments within ADIA occur at a point in time when the external environment is shifting, with still fewer inefficiencies in markets and opportunities that are shorter-lived, and hence, the fund adjusts its approach to capture time-sensitive chances.

A good example of ADIA's new approach is the private credit space. Recently, it invested in Cheyne Capital's real estate private credit fund and committed $1 billion to a new Barclays and AGL Credit Management vehicle. Most of these investments are a resultant outcome of ADIA's ability to be flexible across different asset classes.

In just five years, ADIA's private investments have doubled to $209 billion. The fund has now emerged as one of the most aggressive investors in alternative assets. The fund has also increased internal management of its assets. Two years ago, 55% of its assets were managed internally, and today that number has risen to 64%.

The fund is also changing the method of measuring performance. From outperforming some benchmarks, the ADIA now focuses on absolute and total returns. That enables the fund to get a clearer view of its portfolio.

That is the changing face of ADIA, in whose transformation years will go. The fund has begun considering changes during the period of the pandemic, and the results are already visible on the ground. Being a data-driven fund, it's now better placed to catch the fast-moving opportunities coming the way of players in the market.