This results in significant surpluses for certain Gulf Cooperation Council economies with reduced fiscal expenditure, distributed to select sovereign wealth funds after the year. As a result, Global SWF predicted in its annual report that the larger, more liquid, and globally oriented savings funds, such as Abu Dhabi’s ADIA, Kuwait’s KIA, and Qatar’s QIA, would experience considerable capital inflows.

Due to their more negligible exposure to conventional bonds and stocks, strategic funds with sizable portfolios of domestic assets, such as Mumtalakat in Bahrain, ICD in Dubai, and Abu Dhabi’s Mubadala and ADQ, do not anticipate receiving significant capital infusions.

“In conclusion, the current economic situation will strengthen regional investors. Middle Eastern sovereign wealth funds are more prepared than ever to shine in this situation. Global SWF’s annual report shows that from USD 21.8 billion in 2021 to USD 51.6 billion in 2022, they invested abroad in Western economies, including the US and Europe,” Global SWF said in its annual report.

2023’s top 10 most active sovereign investors include five investors from the GCC.

SWFs’ Expansion By 2030

The estimated $10.6 trillion in sovereign wealth funds in 2022 is predicted to increase to USD 12.6 trillion by 2025 and USD 17.3 trillion by 2030. According to Global SWF, this will include an increase in AUM and any new funds created due to excessive earnings or a need for capital.

Consolidation and rising contributions will continue to benefit public pension funds, whose values are projected to increase from USD 20.8 trillion to USD 24.6 trillion by 2025 and USD 33.2 trillion by 2030, respectively.

By 2030, there will be at least 500 SOIs, and some of them, if they are successful, might become highly important and help the industry grow, according to Global SWF. Also, the Top 15 will likely still include the top four Middle Eastern funds, with Saudi Arabia’s PIF perhaps rising to the top with USD 2 trillion.

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Abu Dhabi Investment Authority, which is thought to be in charge of USD 708 billion worth of assets, also said in an annual report that it had reorganised parts of the company by merging different departments and putting some operations in one place.

On a point-to-point basis, its 20-year and 30-year annualised rates of return were both 7.3% at the end of the previous year, up from a 20-year rate of 6% and a 30-year rate of 7.2% in 2020.

The Abu Dhabi-based fund stated that “Abu Dhabi Investment Authority sought out opportunities in areas and sub-regions with significant potential over the long run and is continuing to build out its direct exposure to private markets.”

It also made money by allocating its stock portfolios to take advantage of new opportunities, such as those created by the different ways the government dealt with the COVID-19 pandemic.

According to Abu Dhabi Investment Authority, its long-term portfolio strategy places 45% to 60% of its exposure in North America, 15% to 30% in Europe, and 10% to 20% in developing economies. In addition, 32% to 42% of the total asset allocation was invested in developed stocks.

As part of its restructuring efforts, the fund set up a Core Portfolio Department, which it says makes “trading and rebalancing more efficient and flexible.”

The Central Investment Services Department established “a single point of visibility” for the entire portfolio and practical investment support activities across the organisation.

Abu Dhabi Investment Authority said it gave front-line managers more freedom as part of a larger plan to streamline internal processes and improve the ability to respond quickly to new opportunities.

The fund reported a decrease in headcount overall, but it did not specify by how much. According to the report, Abu Dhabi Investment Authority employs 1,520 people.

According to sources who spoke to Reuters in March, Abu Dhabi Investment Authority eliminated dozens of positions to improve efficiency and save about 1 billion dirhams (USD 270 million).

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In a recent development, the Kingdom of Saudi Arabia’s Public Investment Fund (PIF) said that it has become the primary investor to a $300 million shariah credit fund. Furthermore, the investment unit of the Australian state, Queensland Investment (QIC) has rolled out a private debt team, recently.

2020 was a tricky year for the global sovereign and pension funds as private-debt fundraising plummeted substantially due to the global downturn, along with a slump in commitments towards direct lending.

Activity is expected to rebound this year, but the global situation is still mired by the fear of fresh infections and lockdown. State-owned investors are at the forefront because of their long-term investment strategies.

Global funds are focusing on external partners to operate their portfolio and investments. While some funds such as QIC and ADIA have their own team to operate. QIC’s team is expected to handle infrastructure assets including analysis and management of private debt.

According to QIC, the operations are expected to become a financial stimulus for segments such as real estate, infrastructure and companies rebounding after the pandemic.

Antoine Josserand, head of business development at pan-European private credit manager Pemberton Asset Management, told the media,” Now we are seeing real interest from sovereign and pension funds that weren’t there a couple of years ago. It’s a reflection of the fact that they recognise the merit in terms of diversification of their alternative asset bucket.”

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Referring to data from IPE Real Assets “Not only have large institutional real estate investors become more ‘global’ in origin, they are investing more globally.”

“Institutional investors have been increasing their portfolio allocation to alternative investments including real estate.”

Being one of the richest sovereign wealth funds in the world, ADIA’s real estate projects include the $2bnn-plus high-end residential Waterline Square development on New York’s Hudson River, the 200mn euro deal with developer Bouygues Batiment lle-de-France for constructing a 38-storey office tower in Paris and the Mall of Switzerland opened last November.

In real estate, ADIA oversees assets worth $62.1bn enabling it to become the world’s number one real estate investor, said Credit Agricole’s IndoSuez Wealth Management in a research statement. This accounts for 7.5% of the total assets under its supervision.

Additionally, ADIA also handles reserves of the emirate of Abu Dhabi, which is said to produce three percent of the world’s oil output.

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Powered by Infosys, the Adecco Group’s end-to-end online staffing platform Adia has already gained momentum across multiple cities in Switzerland and the UK, and will be expanding into more countries in the coming quarters. This new platform leverages the Adecco Group’s key strengths in the industry by providing scale, speed and agility to introduce new ways of doing business in the digital economy.

Adia aims at revolutionising the industry by matching the demand and supply of talent more effectively and managing that talent more efficiently. Targeting candidates and clients across multiple industry segments such as hospitality, events, logistics and many more, Adia makes it possible for employers to find temporary staff for short term assignments and provides a brand new experience to both clients and candidates.

The platform’s algorithm matches jobs to workers based on skills, level of experience, and proximity to the place of work as well as the job seeker’s real-time availability. The user can hire new staff, plan shifts, issue contracts and approve timesheets from this platform, all in real-time.

Alain Dehaze, Chief Executive Officer, the Adecco Group, said, “At the Adecco Group we are focused on transformation and innovation to capture the opportunities we see in the evolving world of work. We are thrilled with the success Adia has experienced so far and we’re looking forward to continuing the international rollout over the coming quarters. As part of our co-creation strategy, we’re working with Infosys to bring innovation across other parts of the business and we are delighted to have partnered with the best-in-class to boost our digital strategy and power our vision of what’s next in the staffing industry.”

Rajesh Krishnamurthy, President and Head of Europe, Infosys, said, “The pace of change we’re experiencing today is unprecedented and it urges organisations to constantly renew themselves, as well as leverage technology to develop new business models, if they are to remain relevant and succeed in an increasingly evolving world. Over the past few years, the emergence of the ‘platform economy’ has set the pace of success for the most valuable companies in the world. By bringing speed, scale and an innovative platform that connects candidates and employers, while enhancing the Adecco Group’s unique expertise, we’re powering change in the industry, helping the Adecco Group fundamentally redefine the future of staffing and realise its vision of the future of work.”

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