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Abu Dhabi wealth fund ADIA says tech will remain in focus after 2024 private credit boost

DUBAI - The Abu Dhabi Investment Authority (ADIA), one of the world's largest sovereign wealth funds, expanded its investments among certain asset classes including private credit last year, as risk assets posted a second consecutive year of "significant gains", it said on Wednesday.

ADIA is the oldest of Abu Dhabi's three major government-controlled funds that invest on behalf of the emirate's government.

It does not disclose the value of its assets, but sovereign-wealth-fund research firm Global SWF estimates they are worth $1.11 trillion.

"By gaining a deeper understanding of the total portfolio's risk-return dynamics, ADIA has broadened its investable universe within certain asset classes," Managing Director Sheikh Hamed bin Zayed Al Nahyan, a member of Abu Dhabi's ruling family, said in the fund's 2024 review.

ADIA said its dynamic approach to private credit allowed it to capitalise on rising demand for alternative and flexible funding, with the asset class a focus for its private equities, real estate and infrastructure teams.

Private credit, which refers to non-bank lending, has expanded in recent years, attracting investments from some of the world's largest asset managers, as stricter regulations make it more expensive for traditional lenders to finance riskier loans.

Data centres and other digital infrastructure remained a growth area, ADIA said, adding that its "approach to parts of its actively managed equities portfolio also evolved" as it expanded its ability to invest flexibly across a broader range of equity and equity-related strategies.

The fund's 20-year and 30-year annualised rates of return on a point-to-point basis were 6.3% and 7.1%, respectively, compared to 6.4% and 6.8% in 2023.

The global economic backdrop is likely to remain complex in 2025, with expectations of a stable or slightly higher inflation and equity market concentration in the U.S., which poses challenges for portfolio managers, the managing director said.

He added that ADIA will keep betting on technology and the "effective use" of data to navigate the investment environment.