The Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds, announced that it achieved strong returns in 2021, driven by strong stock performance.
The Authority is thought to manage $708 billion in assets. It was founded in 1976 as a global investment institution with diverse assets that invests financial resources on behalf of the Government of Abu Dhabi through a robust methodology and a strategy focused on long-term returns.
ADIA stated in its annual report for 2021, which included the Authority’s achievements and procedures during this period, that the Authority’s annual returns for a period of 20 and 30 years – on a basis points basis – amounted to 7.3 percent and 7.3 percent respectively, compared to 6 percent and 7.2 percent in 2020.
The Authority stated that it sought opportunities in areas with high long-term potential and continued to increase direct exposure to private markets.
It also noted that it has benefited from positioning equity portfolios to capitalize on emerging trends, including opportunities arising from differing government responses to the pandemic.
Sheikh Hamed bin Zayed Al Nahyan, managing director of ADIA, said in a speech included in the report, “History will look to 2021 as the year in which the global economy and stock markets witnessed the beginning of a large-scale recovery after the Coronavirus pandemic.”
He added that in 2021, the world’s major central banks kept interest rates close to zero and pumped liquidity into the markets through the quantitative easing policy, noting that major global economies agreed to large monetary stimulus to mitigate the effects of the pandemic.
Additionally, Sheikh Hamed mentioned that these measures helped to address major issues that had stymied market progress in recent years, such as the emergence of coronavirus mutations, supply chain disruptions, and accelerating inflation.
Furthermore, he indicated that the ADIA is in a good position to benefit from market conditions in 2021, as it achieved good absolute and relative returns.