What Is the Abu Dhabi Investment Council (ADIC)?
Abu Dhabi Investment Council (ADIC) is a sovereign wealth fund owned by the government of Abu Dhabi, the capital city of the United Arab Emirates (UAE). ADIC is wholly owned and administered by the UAE and is funded by revenues generated by the country’s oil industry. ADIC invests these revenues in a variety of asset classes, including stocks, bonds, real estate, infrastructure, and private equity.
The Abu Dhabi Investment Authority (ADIA), one of the world's largest sovereign wealth funds, spun off ADIC in 2007. ADIC became part of Mubadala Investment Company in 2019, which is also owned by the government of Abu Dhabi.
- The Abu Dhabi Investment Council (ADIC) is a sovereign wealth fund owned by the government of Abu Dhabi that is responsible for investing the government's financial resources.
- In 2019, ADIC merged with Mubadala Investment Company, which is an investment company also owned by the government of Abu Dhabi.
- The primary source of revenue for Abu Dhabi comes from the oil industry and sovereign wealth funds typically invest a country's surplus reserves.
- ADIC invests in a variety of asset classes, including stocks, bonds, real estate, infrastructure, and private equity.
- ADIC is separate from the Abu Dhabi Investment Authority (ADIA), which spun off ADIC and is a separate sovereign wealth fund.
What Are Sovereign Wealth Funds (SWFs)?
Understanding the Abu Dhabi Investment Council (ADIC)
The Abu Dhabi Investment Council sought to invest the government’s surplus oil revenues in a globally diverse portfolio of actively managed strategies to generate positive risk-adjusted investment returns. Although the fund invests in assets around the world, the portfolio’s capital growth is used to expand Abu Dhabi’s economy and help local companies broaden their international exposure.
Money from a country's excess reserves, set aside for investment to benefit its economy and domestic population, typically composes a sovereign wealth fund (SWF). The funding for an SWF often comes from central bank reserves that accumulate due to budget and trade surpluses or revenue derived from the export of natural resources.
ADIC's investment strategies include relative value strategies, hedged equity strategies, macro strategies, event driven strategies, and a systematic CTA.
Some countries launch SWFs to diversify their revenue streams. For instance, the UAE relies on oil exports for its wealth. Therefore, it devotes a portion of its reserves to wealth funds that invest in diversified assets to help protect the country from oil-related price and supply risks.
Merger of the Abu Dhabi Investment Council (ADIC)
In March 2018, the UAE’s President issued a law merging ADIC into Mubadala Investment Company, another UAE sovereign wealth fund, in an effort to reduce costs, streamline operations, and further diversify the UAE’s economy after an extended period of low oil prices.
The merger of the two entities resulted in a combined investment portfolio of approximately $250 billion. As of 2021, Mubadala has $284 billion in assets under management.
Mubadala Investment Company was founded in 2017 as part of Abu Dhabi’s endeavor to broaden its economy and create jobs by investing oil industry proceeds into profitable companies. Some of Mubadala's better-known investments include positions in Advanced Micro Devices and EMI Music Publishing.
Are ADIA and ADIC the Same?
No, the Abu Dhabi Investment Authority (ADIA) and the Abu Dhabi Investment Council (ADIC) are not the same. ADIA spun off ADIC in 2007 and both are now separate investment entities managing the investments of Abu Dhabi.
Who Owns the Abu Dhabi Investment Authority?
The Abu Dhabi Investment Authority (ADIA) is owned by the Emirate of Abu Dhabi, which is part of the country of the United Arab Emirates. It is, therefore, a government-owned sovereign wealth fund.
Which Country Has the Largest Sovereign Wealth Fund?
Sovereign wealth funds manage the assets of countries. The largest sovereign wealth fund is Norges Bank Investment Management in Norway. As of June 2022, it manages $1.36 trillion in assets. The second-largest is China Investment Corporation in China, which manages $1.22 trillion. Abu Dhabi Investment Authority is the fourth-largest with $829 billion in assets under management (AUM). Mubadala, of which the Abu Dhabi Investment Council (ADIC) is now part of, ranks twelfth, with $284 billion in assets under management.