ADIA plans to hire regional experts

The world's third largest sovereign wealth fund wants to increase the number and types of deals it invests in with its GPs, including secondaries opportunities.

Abu Dhabi Investment Authority (ADIA), the world’s third-largest sovereign wealth fund by assets, plans to hire investment professionals with specific regional focus, particularly on China and India, as part of the restructuring of its private equity business to boost its ability to invest directly in private companies.

The gulf investor has restructured its Abu Dhabi-based professionals into three regional units focusing on the Americas, EMEA, and Asia-Pacific as part of efforts to grow its principal investments business, according to a spokesman. ADIA’s private equity team was previously split into five units: funds, secondaries, principal investments, venture capital and private debt.

The move, which is part of ADIA’s attempt to increase opportunities to invest alongside general partners and be involved at the earliest stages in the valuing and structuring of deals, does not involve cutting relationships with any external general partners. ADIA wants to increase the number and types of deals it invests in with its GPs and this includes direct investments and secondaries opportunities, the spokesman said.

“We are fortunate to have both a strong in-house global investment team, as well as relationships with leading private equity firms that in many cases span decades,” Hamad Shahwan Al Dhaheri, executive director of ADIA’s private equities department, said in an emailed statement about the team restructure. “These latest changes will open the door to new ways of collaborating, and to building a stronger and more market-aligned private equity practice.”

Professionals in ADIA’s private equity unit’s three regional teams will focus on five sectors: financial services, healthcare, industrials, technology, and consumer, and experts as well as heads for each sector will be appointed. It is not clear how many investment professionals the fund plans to hire over the next 12 months and the change in strategy may also involve staff cuts.

ADIA, which opened a research Hong Kong office in October – its sole overseas outpost – has no plans to open outposts in any of the three regions as part of the changes, the spokesman said. In November 2015 the fund said it was closing its London office after two decades as part of a strategic review. The office had no private equity operations.

Craig Nickels, who has been ADIA’s head of US fund investing since 2013, will become global head of research.

The move only affects ADIA’s private equity team and there are no plans to restructure its real estate and infrastructure units, according to the spokesman.

The $792 billion sovereign wealth fund, which has a target allocation of up to 8 percent of its portfolio to private equity, has previously cut back on the proportion of its assets managed by external managers. In its 2015 annual review, the fund said around 60 percent of its assets were managed externally in areas including private equity, fixed income, money markets, alternative investment, real estate, infrastructure, and equities, a drop from around 75 percent in 2013.

The sovereign’s private equity team is led by global head Sherwood Dodge, who joined in early 2016, and Al Dhaheri, who is oversees the department’s activities.