ADIA Hires Former GM Economist to Improve Investment Decisions

(September 7, 2010) — The Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds, has hired General Motors’ Ted Chu as its chief economist.

According to the Middle East’s ADIA, Chu will be based in Abu Dhabi and “will be responsible for producing in-depth international and regional economic analyses and making recommendations based on this research.”

The Singapore-born Chu joined GM in 1996 and his new position at the Middle Eastern sovereign wealth fund shows a growing demand for macro-strategies and research amid a rough economic environment. In related news, Canadian investment bank RBC Capital Markets hired a senior macro-analyst last month with the addition of Jens Larsen, who was previously at the Bank of England.

Analysts estimate the assets of the secretive sovereign wealth fund, which produces more than 95% of the oil of the United Arab Emirates, come to between $500 billion and $700 billion.

In April, Sheikh Hamed Bin Zayed Al-Nahayan was named the new managing director of ADIA, succeeding his older brother, Sheikh Ahmed bin Zayed Al Nahyan, who died the previous month in Morocco after his glider crashed into a lake near the capital Rabat. The shift in power was not a surprise, reflecting an effort to keep control of the world’s biggest fund in royal hands.

Earlier this year, the fund, which has rarely revealed any details of its investment strategy, provided a surprising peek into its investment portfolio when it released its first yearly financial statement. The report, released in March, showed that a majority of the fund’s holdings are focused on conventional investments, such as North American and European stocks and bonds. The report also revealed that as much as 45% of its assets are invested in the developed world. According to ADIA, the fund gained 6.5% annually during the past two decades, despite losses from a $7.5 billion investment in Citigroup and other investments. The fund gained 8% annually over the last 30 years through the end of 2009.

ADIA, established in 1976, owns assets ranging from Citigroup bonds and a stake in Gatwick airport to residential property in cities worldwide.