Abu Dhabi’s sovereign fund ADQ manages $157bn in assets

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Sovereign wealth fund tracker Global SWF estimated on Monday that Abu Dhabi’s ADQ, which last week became the new owner of state carrier Etihad, has seen its assets under management grow to $157 billion.

The smallest of Abu Dhabi’s three main sovereign wealth funds, ADQ has emerged as one of the region’s most active dealmakers, and Global SWF suggested it could even merge in future with Mubadala Investment Company, Abu Dhabi’s second-biggest SWF.

ADQ began in 2018 as a holding company for government assets and has been consolidating its portfolio, privatising some assets and making strategic acquisitions to build companies that are leaders in their industries locally or regionally.

The fund declined to comment. Global SWF said it first estimated ADQ’s portfolio at about $110 billion in March 2021 and its value had remained “relatively stable” since.

Developments since the third quarter of this year have pushed the fund’s assets under management (AUM) higher, however, including the Etihad transfer last week.

A surging stock price for utility TAQA, which ADQ sold 8.6 percent to a subsidiary of International Holding Company, pushed its AUM higher. IHC and ADQ are both chaired by Sheikh Tahnoon Bin Zayed Al Nahyan, the UAE’s national security adviser and a half-brother of UAE President Mohammed bin Zayed.

Global SWF said its stake in TAQA more than doubled in value to $71.9 billion.

“Now, one could argue that TAQA does not have the necessary free float and trading volume to make the stock price reliable, but the reality is that the company has become one of the largest utilities in Europe, Middle East and Africa, and is becoming a centrepiece in ADQ’s use of soft power overseas,” Global SWF said.

ADQ has also benefited from a higher share price for Abu Dhabi Ports, 25 percent of which was floated in February with the rest held by ADQ, a stake valued at about $5.9 billion.

“The role of the entity chaired by Sheikh Tahnoon is not fully understood yet,” Global SWF said.

“If ADQ continues to monetise stakes in national champions, and to increase its weight into private equity and venture capital, its portfolio will look increasingly like that of its sister organisation Mubadala, which may lead to potential merger talks in the future.”

Mubadala had $284 billion in assets under management at the end of last year, according to an investor presentation reviewed by Reuters.