New Abu Dhabi wealth fund signals 'supercharged' approach
The universe of Abu Dhabi sovereign wealth funds is being shaken up by a new player, L’imad, which analysts say signals “the start of a supercharged private equity-style sovereign wealth fund that will proceed with a global reach”
A major reshuffle of Abu Dhabi’s $1.8tn sovereign wealth fund industry has seen the emergence of a new heavyweight fund called L’imad with an estimated size of £300bn, fDi Intelligence has reported.
On January 30 the government announced L’Imad would take over the assets of bigger peer ADQ, which ranks as the 13th largest sovereign wealth fund in the world.
ADQ was primarily tasked with partnering with strategic investors to build domestic value chains in areas like manufacturing, transport and agritech to reduce Abu Dhabi’s economic dependence on oil.
But Salar Ghahramani, president and chief executive of SWF-focused Global Policy Advisors, sees the new fund’s arrival signaling “the start of a supercharged private equity-style sovereign wealth fund that will proceed with a global reach”, meaning it will focus on direct stakes in companies and projects rather than listed securities.
L’imad is led by Abu Dhabi’s 44-year-old crown prince Khaled bin Mohamed bin Zayed and when it takes control of ADQ’s assets it will hold national carrier Etihad, AD Ports and healthcare platform PureHealth.
Until recently, the emirate had three sovereign wealth funds. Adia is its original fund, which invests the government’s oil revenues in international public and private markets. Mubadala invests in strategic projects abroad like renewables and semiconductors. ADQ was formed in 2018.
This set-up started to change last October when L’imad began buying assets — including an 85 per cent stake in urban developer Modon, an 18 per cent stake in Chinese electric vehicle manufacturer NIO and 100 per cent of McLaren Automotive — from other Abu Dhabi investors.
The government’s brief statements about L’imad say it will develop investment platforms focused on building national champions in sectors of strategic importance.
Danielle Myles is senior editor at fDi Intelligence, a sister title of AOX which this article originally appeared in