Abu Dhabi Investment Authority Expected to Do More Private Market Deals as Oil and Gas Thrives
Posted on 08/29/2022
As energy prices remain high globally, oil-based sovereign wealth funds are benefitting from this commodities cycle. This is after years of low oil prices that put stress on GCC members’ finances. The Abu Dhabi Investment Authority (ADIA) went through major shifts in its various asset management departments. ADIA remains focused to target private market companies in various geographic markets including the U.S., India, and parts of Europe. Before the COVID-19 pandemic, ADIA instituted plans to increase allocation to infrastructure, real estate, and private equity.
Big Balance Sheet
ADIA and Singapore’s GIC Private Limited are keen on using their massive balance sheets to fund private equity buyout deals in the U.S. For example, in the later half of 2022, Bain Capital, LP and a wholly owned subsidiary of ADIA signed a definitive agreement to acquire Merchants Automotive Group, DBA Merchants Fleet, and Merchants Auto. Merchants Fleet is a U.S. fleet management company.
In Europe, ADIA partnered with Global Infrastructure Partners to acquire a 72.55% equity interest in VTG Aktiengesellschaft (VTG), a European railcar lessor, from Morgan Stanley Infrastructure Partners via Warwick Holding GmbH and Hamburg-based Joachim Herz Stiftung, a foundation.
Chinese Biotech
Within Asia, ADIA is targeting areas of promise such as e-commerce, real estate and biotech. ADIA recently invested in China-based Sironax, which is a clinical-stage biotechnology company dedicated to the discovery and global development of novel treatments for patients with age-related degenerative diseases. In that same month, ADIA and GIC funneled capital into China-based Taibang Biologic Group, a plasma products maker.
ADIA Transaction Deal Values and Volume by Year (Direct Transactions)
Source: Sovereign Wealth Fund Institute (SWFI). Deal Types: New Security Issue and Deals.
The cash-rich sovereign investors are making changes to their investment strategies as the world is enthralled in inflation and central banks are forced to do something about it (raise rates). ADIA does not appear be slowing down in the world of private equity and private market investments.
