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Abu Dhabi Investment Co. Plans to Start Equity Funds

(Bloomberg) / 29 October 2008

ABU DHABI — Abu Dhabi Investment Co., the government-controlled fund manager with more than $2 billion in assets, plans to start equity funds as it looks to manage more third-party money.

The open-ended funds, to be seeded with some capital from ADIC,  will focus on the Middle East and North Africa and will be started in the first quarter of 2009, Mohammed Al Hashemi, executive director of asset management at ADIC, said in an interview in London on Tuesday.

“We’re actually setting up ourselves as a broad-based investment management institution, organisation.”

Stock markets in the Middle East have declined more than 30 per cent in the last six months as foreign investors withdrew funds and regional credit markets seized. ADIC, majority owned by sovereign wealth fund Abu Dhabi Investment  Council, currently manages three funds open to foreign investors focused on infrastructure, private equity and hedging activities.

Abu Dhabi owns more than 90 per cent of the U.A.E.’s oil reserves, almost 8 per cent of the world’s total.

The Abu Dhabi Investment Authority, its sovereign wealth fund, is the world’s largest with assets of between $250 billion and $875  billion, according to the International Monetary Fund.

ADIC said on October 22 that its private equity fund bought a majority stake in Unitra METS Group, a beverage distributor based in Dubai. UBS AG, Europe’s largest bank by assets, and ADIC agreed on February 11 to start a $500 million fund as part of a new venture to invest in Arab and Turkish infrastructure projects.

The UBS fund is not closed yet, Al Hashemi said.

“We already have some seed investors and some seed investments, including Queen Alia airport expansion in Jordan,” he said. The infrastructure fund has a life span of 10 to 12 years. 

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