Economy

Partnerships prove central as ADIA looks to India and beyond

August 7, 2024

India has attracted more than half of Gulf wealth fund investments in recent years and ADIA alone has invested hundreds of millions of dollars — India has attracted more than half of Gulf wealth fund investments in recent years. ADIA alone has invested hundreds of millions of dollars

ADIA pursuing deals in India
Working in consortiums
Almost $1 trillion under management

Abu Dhabi Investment Authority, the UAE’s largest sovereign wealth fund, is increasingly forming consortiums to make its deals – and focusing on purchases in India.

After a string of acquisitions in Asia, ADIA is now leading a consortium with CVC Advisers with a view to bidding for UK investment platform Hargreaves Lansdown.

In June the consortium offered £11.40 ($14.51) per share for Hargreaves Lansdown, valuing the business at £5.4 billion.

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The final day to make a firm offer had previously been August 5, the company said in a regulatory filing to the London Stock Exchange. This has since been extended to August 9.

ADIA has completed various deals with CVC in the past. It is a major shareholder in Dutch accounting company TMF Group and Florida’s Fidelis Insurance. It also bought a 30 percent stake in appliance warranty company Domestic & General from CVC in 2019.

“By partnering with other investors, ADIA mitigates financial risks, leverages specialised expertise, increases its investment capacity, and enhances its negotiation power,” said Vijay Valecha, chief investment officer at broker Century Financial.

Established in 1976, ADIA invests on behalf of the government of Abu Dhabi. With assets under management of $968 billion, it is the world’s eighth-largest wealth fund. The fund is chaired by Sheikh Tahnoun bin Zayed Al Nahyan, the brother of the UAE president, deputy ruler of Abu Dhabi and the country’s national security adviser.

In the first six months of this year, a total of around $52 billion was spent by Gulf sovereign wealth funds, with ADIA and Saudi Arabia’s Public Investment Fund dominating, according to Global SWF.

In June, ADIA teamed up with private equity firm Advent International to take up a minority stake in US investment adviser Fisher Investments believed to be worth between $2.5 billion and $3 billion.

Focus on India

Last month it was revealed that ADIA was part of a consortium that had submitted a bid to acquire a controlling stake in the Indian snacks business Haldiram’s, valuing it at up to $8.5 billion.

It formed part of a flurry of investments by ADIA in the country, which is experiencing strong domestic demand for consumption and investment. The Indian government’s continued emphasis on capital expenditure is helping to drive an expected 9.6 percent growth in its economy this year.

“ADIA’s 2024 portfolio strategy reveals a strategic shift towards greater diversification and tactical adjustment in response to changing market conditions,” said Valecha.

On Wednesday ADIA was named as one of the anchor investors in Indian ecommerce operator Brainbees Solutions, ahead of its initial public offering.

In April ADIA and India’s Kotak Alternative Investment Fund announced a $240 million investment to support Indian developer Prestige Group in building residential projects across four Indian cities.

The same month, Indian power company JSW Energy raised $600 million by selling shares to institutional investors, which included ADIA.

In July, ADIA led the $120 million funding round of Indian online beauty retailer Purplle Group.

India accounted for more than half of all the investment deals made by Middle Eastern funds in Asia since 2020, dwarfing China and Southeast Asia. It represented 58 percent of the capital invested.

“There is a really diverse opportunity across the asset classes in India compared to China,” Jeff Schlapinski, managing director of research at the Global Private Capital Association, told AGBI.