Abu Dhabi tops sovereign wealth funds globally

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Abu Dhabi Investment Authority (ADIA) is the world’s richest sovereign wealth fund, according to a global organisation designed to study sovereign wealth funds.

The Sovereign Wealth Fund (SWF) Institute listed ADIA’s assets at a staggering $627 billion. The Abu Dhabi Investment Authority was established in 1976 which replaced Financial Investments Board, part of the then Abu Dhabi Ministry of Finance. The Fund is wholly owned and subject to supervision by the Government of Abu Dhabi.

According to the SWF website, the Abu Dhabi Investment Authority’s draws its funding from oil, specifically from the Abu Dhabi National Oil Company (ADNOC) and its subsidiaries which pay a dividend to sustain ADIA and its sister fund Abu Dhabi Investment Council (ADIC).

The ADIA receives payments on a periodic basis when the Abu Dhabi government runs a surplus to its budgetary requirements and other funding commitments. The Abu Dhabi Investment Authority receives 70% of any budget surplus, while the other 30% of surplus goes to the Abu Dhabi Investment Council (ADIC).

The ADIA received a transparency rating of 5 on the ‘Linaburg-Maduell Transparency Index’, developed by Carl Linaburg and Michael Maduell, at the Sovereign Wealth Fund Institute. The minimum rating a fund can receive is a 1, however, the Sovereign Wealth Fund Institute recommends a minimum rating of 8 in order to claim adequate transparency.

Norway’s Government Pension Fund Global ranked second with $611 billion. The fund, which changed name in January 2006 from The Petroleum Fund of Norway, is not actually a pension fund as it derives its financial backing from oil profits and not pensioners. It is among the most transparent (ranked 10 on the Linaburg-Maduell Index) of the sovereign wealth funds in its holdings and investments.

Saudi Arabian Monetary Agency, established in 1952, stands at number 4 position on the SWF rankings with assets worth $532.8bn. The desert kingdom’s main sovereign fund draws its funding from oil and holds a transparency rating of 4.

Kuwait Investment Agency, also an oil income oriented fund, is the sixth biggest sovereign fund in the world, holding assets worth around $296 billion. The Kuwait Investment Office was founded by Sheikh Abdullah Al Salem Al Sabah, the ruler of Kuwait from 1950-1965, who decided that the oil revenue would be used for the welfare of the people of Kuwait. It was created in 1950. The Kuwait Investment Authority ensures that the State of Kuwait transfers 10% of oil revenue into the ‘Reserve for Future Generations’ on an annual basis.

Qatar’s sovereign wealth fund, which has made several high profile acquisitions and investments worldwide  – ranked 12th on the table with $100bn worth assets under its belt. The Qatar Investment Authority is a sovereign wealth fund which has heavily invested in domestic and international markets to curtail the tiny Gulf state’s reliance on energy price volatility. Qatar is one of the largest exporters of liquefied natural gas (LNG).

The Investment Corporation of Dubai, established in 2006, is a $70 billion worth fund which is placed 14 on the Sovereign Wealth Fund Rankings.

Abu Dhabi’s International Petroleum Investment Company (IPIC) placed 15 on the rankings with assets worth $65.3 billion and an enviable transparency rating of 9. Based in Abu Dhabi, the UAE’s capital, the IPIC portfolio includes investments in Austria, Egypt, Pakistan, Spain, South Korea, UAE, Germany, Oman, Japan, and Portugal. Investments include downstream hydrocarbon operations, petrochemical plants, pipelines, power utilities, and shipping.

Libyan Investment Authority, established by late Muammar Gaddafi in 2006, is the biggest sovereign wealth fund in Africa with assets worth more than $65 billion. The fund has a bare transparency rating of 1 and stood at 16 on the SWF ranking.

Revenue Regulation Fund of Algeria bagged 18th position followed by Abu Dhabi’s Mubadala at 19th. Both oil-based revenue funds enjoy assets worth $56.7 and $48.2 billion respectively.

sovereign wealth fund top 20
Top 20 Fund Rankings. Table - SWFInstitute.org
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