Abu Dhabi SWF Will Refine Its Investment Stategy

(January 11, 2010) — Abu Dhabi Investment Authority (ADIA), with estimates of its holdings ranging from less than $400 billion to $875 billion and up, revealed in a German business daily Handelsblatt interview that despite the global downturn, it sees “significant, long-term investment potential” in the U.S. and Europe.

These two areas house the bulk of ADIA’s holdings, with up to 50% and 35% of its assets respectively. Ten percent to 20% are in Asia.

Sheikh Ahmed bin Zayed al Nahayan, managing director of ADIA, the world’s biggest sovereign wealth fund, said that U.S. treasuries, still the most liquid benchmark, will continue to be an imperative diversification tool. Nevertheless, ADIA plans to tweak its investment approach to cope with the rough economic climate.

“You can be sure that, like everyone else, we are looking closely to identify areas where strategies perhaps did not work as well as they could have, and will refine our approach where needed,” said Sheikh Ahmed, according to Reuters.

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ADIA officials rarely discuss the fund’s investments.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

(January 11, 2010) — Private equity fundraising suffered in 2009, battered by the late 2008 financial crisis, and it’s now at a 5-year low.

According to Preqin, a London-based data provider, $246 billion was raised by 482 funds last year, down 61% from 2008 and the lowest since 2004.”We are seeing a trend away from the bigger mega-buyout funds toward more of a focus on smaller mid-market and regionally focused vehicles,” the report said. The average period of time to raise a fund is now more than 18 months, when it previously stood at just a year, Reuters reports.

The biggest fundraisers of 2009, according to the report, were CVC European Equity Partners V (raised $10.7 billion); First Reserve Fund XII (raised $8.8 billion); and Hellman & Friedman VII (raised $8.8 billion). The report added that the likelihood of a return to the fundraising levels seen in 2007 and 2008 are “very slim.”

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The bleakness of the private equity space is illustrated by Blackstone Group LP, the world’s biggest buyout company that raised a $21.7 billion private-equity fund in 2007. For months, its new flagship fund has been at a standstill in the $8 billion to $9 billion range, the Wall Street Journal reported, while Madison Dearborn Partners LLC, which planned to raise a $10 billion fund, has been stuck at about $4 billion.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742