UAE SWFs Drive To Diversify Portfolios

Sovereign-linked UAE funds are continuing to target foreign assets in a bid to diversify their portfolio and reduce their reliance upon oil. This year Aabar Investments, which is majority owned by Abu Dhabi state fund International Petroleum Investment Corporation (IPIC), is just one in a line of SWFs that has been busy investing in a wide range of assets in the real estate, infrastructure and automotive sectors. Although only a relative new kid on the block in terms of state-backed investment vehicles in the Middle East, Aabar (established in 2005) is an altogether different proposition from its longer-established peers, such as the behemoth that is the Abu Dhabi Investment Authority (Adia). Aabar is operating under the mandate of not only seeking financial returns, but also helping promote Abu Dhabi as an investment hub. Aabar's GBP110mn (US$183mn) joint acquisition of a 75.1% stake in the Brawn GP motor racing team - winner of this year's constructors' and drivers' championships - is an attempt to satisfy both of these mandates.

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