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Abu Dhabi SWFs invested $26.1b in fresh capital in H1 2024

Abu Dhabi SWFs invested $26.1b in fresh capital in H1 2024
4 July 2024 10:00

 A.SREENIVASA REDDY     (ABU DHABI)

Abu Dhabi-based sovereign wealth funds (SWFs) – Abu Dhabi Developmental Holding Company (ADQ), Abu Dhabi Investment Authority (ADIA), and Mubadala – deployed a total of $26.1 billion in fresh capital in the first half of 2024, according to latest data from consultancy GlobalSWF.

ADQ accounted for $9.2 billion, ADIA for $8.7 billion, and Mubadala deployed $8.2 billion in fresh capital.

Globally, SWFs deployed a total of $64.2 billion in 135 deals in the first six months of 2024. A total of 27 mega-deals, i.e., deals of over $1 billion in value invested or divested by sovereign investors, were reported in H1.

According to GlobalSWF data, Gulf-based sovereign funds made fresh investments of $38.2 billion in 58 different deals. Apart from Abu Dhabi-based funds, Saudi’s Public Investment Fund (PIF) and Qatar’s Qatar Investment Authority (QIA) are other prominent investors from the Gulf.

Among the top 10 investments made by state-owned investors (SOI) in H1 2024, five are from the Abu Dhabi SWFs. ADIA is part of a consortium that bought landline network Telecom Italia in a $5.6 billion deal. Lunate, an Abu-Dhabi based fund, bought 40% stake in ADNOC Pipelines from US-based funds – BlackRock and KKR – at a cost of $5 billion.

Mubadala and other investors bought US-based Truist Insurance Holdings at a cost of $3.1 billion. ADIA, along with other funds, invested in Trans-Java Toll Roads of Indonesia at a cost of $2.8 billion.

ADIA and its partners brought a minority stake in Fisher Investments at a cost $1.7 billion. The UAE is third largest state investor globally, with investments of $2.164 trillion. The top investor is the US, with over $11 trillion, followed by China with $2.9 trillion. Japan, Canada, Norway, Singapore, Australia, Saudi Arabia, and the Netherlands are among the top 10. ADIA and Mubadala are among the top 25 SOIs, with assets under management (AUM) of $968 billion and $302 billion. For the first time in history, the AUM of SWFs passed $12 trillion, and the AUM of Public Pension Funds passed $24 trillion.

GlobalSWF released the new data when it unveiled 2024 GSR Scoreboard, the most comprehensive analysis on the Governance, Sustainability, and Resilience (GSR) practices of the world’s major SOIs. According to the GlobalSWF report, the pressure of sustainability goals is impacting the business practices and investment preferences of the sovereign wealth funds. In 2021, investments in “green assets” (mostly renewable energy) had overtaken investments in “black assets” (mostly, oil and gas and mining) for the first time. This trend has persisted during 2022, 2023, and the first half of 2024.

The report said the buy-back of 40% of ADNOC Oil Pipelines by ADQ-backed Lunate could have reversed the trend, but it was offset by significant activity in green investments. The latter included Mubadala’s investments in Australian, Indian, and Japanese renewable energy.

GlobalSWF report said Middle Eastern funds have experienced the largest improvement in GSR scores, from 32% in 2020 to 48% in 2024. Of the 22 funds from the GCC, which manage $5.2 trillion in assets, nine funds scored better this year than the last year. Saudi Arabia’s PIF continues to lead the charge and has come a long way, increasing its score from 28% in 2020, to 96%.

Mubadala with $302 billion AUM is among the 10 sovereign funds that lead the way in terms of best practices, with an average 9.5/10 Governance score, an average 9.6/10 Sustainability score, and an average 4.5/5 Resilence score. The UAE’s ADQ has seen a 12% rise in GSR score, a testament to its efforts to meet its sustainable commitments.

The newest SWF in Abu Dhabi is pursuing best practices with a passion and, in May 2024, it published significant details about its governance and balance sheet, coinciding with the listing of its inaugural bond issuance in London.  

 

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