ADIA eyes fund restructurings

The $627bn sovereign wealth fund is ramping up its secondaries capabilities, and said to be on the hunt for good fund restructuring opportunities.

The Abu Dhabi Investment Authority (ADIA) has been “beefing up” its private equity investment team over the past year or so in order to target more co-investments and secondaries deals, including the ability to sponsor fund restructurings or spin-outs, according to three sources with knowledge of the matter.

Professionals that have joined ADIA during this time include Pascal Heberling, hired in February this year from Cinven as a senior portfolio manager for ADIA’s principal investments.

It also made a spate of high-level hires in 2012, when ADIA brought on Craig Nickels, former head of private markets at the Washington University Investment Management Company, as head of US fund investments in the private equities department, along with former AXA Private Equity chief operating officer Christophe Florin as head of emerging markets fund investments and Colm Lanigan, whose resume includes stints with CSFB, Caxton Iseman Capital and the IFC, as co-head of PE principal investments.

The $627 billion sovereign wealth fund is said to be positioning itself as a formidable secondaries buyer and backer of synthetic spin-outs and fund restructurings – aiming to play a role similar to that of other large institutional investors like the Canada Pension Plan Investment Board, which has been putting roughly $2 billion to work annually on the secondaries market often via complex restructurings that blend primary and secondary investments. 

ADIA declined to comment.

The Abu Dhabi-based group has already been involved in several “complex” secondaries transactions, according to one source who declined to name specific funds. It was said to be actively pursuing restructuring opportunities at a recent industry conference, according to another source.

ADIA began investing in private equity in 1989 and has a target private equity allocation of between 2 percent and 8 percent, according to PEI data.

It invests with fund managers globally, with a continued emphasis on buyout funds, but in recent years has been increasing its direct investment capabilities as it moves toward reducing reliance on (and fees paid to) external managers.