Abu Dhabi Wealth Fund cuts jobs to save $272 million in costs

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DUBAI, March 4 (Reuters) – The Abu Dhabi Investment Authority, one of the world’s largest sovereign wealth funds, has shed dozens of jobs over the past year as part of a billion dirham ($272.29 million) cost-cutting program, two sources said Reuters with .

The cost savings will help Abu Dhabi’s sovereign wealth fund, which manages $700 billion in assets, to redirect money into new projects such as quantitative research and development.

ADIA, which manages capital on behalf of the oil-rich Abu Dhabi government, has focused on trimming its bloated management team and shedding expensive, long-time staff who have worked there for decades, the sources said, declining to be identified as such not public.

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The fund had a cost-savings target of around Dirham 1 billion, which was communicated internally to management, the sources said.

A spokesman for ADIA said the fund “continuously evaluates its operations to ensure its capabilities, structure and processes are aligned with long-term objectives and allow ADIA to evolve with the investment environment.”

The changes aim to make ADIA, which was formed in 1976 to invest the emirate’s petrodollar surpluses, more nimble and efficient, sources say.

The fund focuses on integrating investment decisions with machine learning and artificial intelligence, following in the footsteps of Singapore state funds GIC and Temasek.

In 2020, she merged her external and internal equity teams and closed its internal Japanese equities department.

The changes resulted in the creation of an equities department, the core portfolio department and the central investment services department.

ADIA’s moves aim to empower frontline managers, consolidate technology systems and simplify governance structures, one of the sources said.

“We expect the SWF to tilt slightly towards private markets and begin to allocate capital into more innovative and potentially more aggressive strategies and products,” said Diego Lopez, managing director at Global SWF, a sovereign wealth fund advisory firm.

He said Gulf countries’ sovereign wealth funds were awash with liquidity after good results in 2020 and 2021 and the surge in oil prices.

“We estimate that ADIA had a 20.9% one-year return in 2020 and expect 2021 to be very strong as well,” Lopez said.

“Such excess capital and firepower allows – and pressures – the fund to reconsider its strategy and align with the new economy and new themes.”

ADIA employed 1,680 people, the fund said in last year’s annual report.

($1 = 3.6726 UAE Dirham)

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Reporting by Hadeel Al Sayegh and Saeed Azhar; Edited by Kim Coghill

Our standards: The Thomson Reuters Trust Principles.

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