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ADIA Nets Positive Return for 2017

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The Abu Dhabi Investment Authority (ADIA) issued its 2017 results. ADIA’s 20-year return bumped up to 6.5% from 6.2% in 2016. Externally-managed assets dropped to 55% from 65% in 2014. 50% of the sovereign fund’s assets are managed by index-replicating strategies, including smart beta strategies. In the 2017 ADIA Review, the report states, “Trying to time markets is extremely difficult, and dangerous, for large and diversified global investors. A more practical approach is to view cycles as opportunities, and to prepare strategies that limit drawdowns and provide sufficient available capital to take advantage of lower asset prices when markets turn lower.”

ADIA’s external equities department has an active focus. The whole external equities department maintains a single global equities pool with a cadre of external fund managers.

Calendar Year Externally-Managed Internally-Managed
Dec 2017 55% 45%
Dec 2016 60% 40%
Dec 2015 60% 40%
Dec 2014 65% 35%

  

ADIA formed the Strategy and Planning Department (SPD), in a move to streamline the sovereign wealth fund’s organization, while reducing complexity, something other large asset owners such as CalPERS have been attempting to do since 2010. SPD is also working on a Risk-Return project to develop allocation of risk in investment departments.

Private Equity

ADIA also changed the organization of its private equity group as the fund wants to make more principal investments. ADIA switched from a buyout-growth-VC product structure to a sector based on five key sectors: Financial Services, Healthcare, Industrials, Technology and Consumer.

DENIED: Bank of England Refuses to Release Venezuelan Gold

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“Whoever has the gold makes the rules,” the King famously said in 1964’s comic strip, The Wizard of Id. England is proving the old truism to be accurate. Keynes’ “barbarous relic” is showing tremendous staying power in a world awash in cryptocurrencies and virtual wealth.

Austria, Germany, and the Netherlands have all repatriated gold reserves in recent years, and they can now count Venezuela among the countries attempting to do the same. Venezuela’s government made the decision to repatriate 14 tons of gold bars on the heels of U.S. sanctions. The custodian, the Bank of England, has refused to release the gold, worth a total sum of US$ 550 million, to Caracas. The British are citing anti-money laundering regulations. The specific concern is that Nicolas Maduro may personally seize the gold and use it for personal gain. Washington’s new rules for Venezuela target the country’s gold exports, based on reports of Maduro spending the country’s current precious metals illegally. Venezuela’s economy collapsed when oil revenue plunged. Supplies of food, medicine, and consumer staples were affected. Shortages and hyperinflation have resulted.

National Security Advisor to the United States, John Bolton, labeled Venezuela a member of a “troika of tyranny,” along with Cuba and Nicaragua. Bolton railed against the “triangle of terror stretching from Havana to Caracas to Managua.” He called it “the cause of immense human suffering, the impetus of enormous regional instability, and the genesis of a sordid cradle of communism in the Western Hemisphere,” Cuba has been accused of assisting the Maduro government. “The Cuban military and intelligence agencies must not disproportionately profit from the United States, its people, its travelers, or its businesses,” Bolton declared. For its part, Nicaragua is in hot water due to a violent crisis that sprung up when President Daniel Ortega announced that there would be changes coming to Nicaragua’s social security system. The U.S. is pushing for free elections.

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RDIF and Makara Capital form Technology Company Investment Joint Venture

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The Russian Direct Investment Fund (RDIF) and Singapore-based Makara Capital, a specialist in transaction financing and asset management, signed a deal to form a US$ 200 million joint investment platform to finance breakthrough innovative projects in Russia and Asia. Ali Ijaz Ahmad, the CEO of Makara Capital, is a board director of the Intellectual Property Office of Singapore (IPOS). Ali Ijaz Ahmad served as an adviser to Morgan Stanley and The Carlyle Group. He also had stints at the World bank and Goldman Sachs. Makara Capital was founded in 2005 as a joint venture with Credit Suisse AG and made independent by its founding partners in 2008.

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SVB Financial Group to Acquire Leerink Holdings

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Linking Boston to the San Francisco Bay Area in the world of pharmaceuticals, SVB Financial Group (SVB) announced that it has entered into a merger agreement to acquire Leerink Holdings LLC, the Boston-based parent company of Leerink Partners LLC, an investment bank focused on the healthcare and life science industries. Jeffrey A. Leerink formed Leerink in 1995. Santa Clara, California-based SVB Financial Group is the parent company of Silicon Valley Bank. SVB is big into life sciences and provides services to many healthcare companies and startups.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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