Abu Dhabi ranked world's top city for sovereign wealth fund capital

Abu Dhabi has been ranked as the world's top city for sovereign wealth fund (SWF) capital, managing $1.67 trillion in assets, according to a new report by industry specialist Global SWF.

The UAE capital is home to major funds including the Abu Dhabi Investment Authority, Mubadala Investment Company and investment and holding company ADQ. The report also included the assets of the Abu Dhabi Fund for Development, Tawazun (including Edge) and federal fund the Emirates Investment Authority, it said.

Norway's capital Oslo, which hosts the Government Pension Fund managing $1.66 trillion, ranked second. Other top cities in the ranking include Beijing ($1.3 trillion, headquarters of the China Investment Corporation), Singapore ($1.13 trillion, GIC Private and Temasek Holdings), Riyadh ($1.11 trillion, home to Public Investment Fund), and Hong Kong ($1.1 trillion, home to China’s SAFE Investment Corporation).

In total, SWFs managed $12.5 trillion in assets as of October 1, with the top six cities accounting for almost two-thirds of these resources.

State-controlled funds from Saudi Arabia, the UAE and Qatar led global sovereign investments in the first six months of this year, with a broad focus on sustainable assets in a push to expand their portfolios, Global SWF said in July.

Investments by the PIF, Mubadala, Adia, ADQ and Qatar’s state investment arm, the Qatar Investment Authority, accounted for more than half of the total sovereign investments during the first half of this year, with their aggregate investment during the period reaching $38.2 billion through 58 deals.

Meanwhile, in the first three quarters of 2024, Adia, Mubadala, and ADQ invested $36 billion in deals globally, accounting for two-thirds of what all Gulf SWFs invested, and 26 per cent of SWF investments, the latest Global SWF report found.

Adia, which invests on behalf of the Abu Dhabi government, makes direct and indirect investments across asset classes such as equities, fixed income, infrastructure, private equity and property, and is among the largest SWFs in the world. Its assets are estimated at $993 billion, credit rating agency DBRS Morningstar said last year, quoting data from Global SWF.

With assets of more than Dh1.11 trillion ($302.2 billion), Mubadala is at the heart of Abu Dhabi's efforts to diversify its revenue base. Its interests span six continents and include the aerospace, semiconductors, metals and mining, renewable energy, oil and gas, and petrochemicals sectors. It has also expanded to life sciences and pharmaceutical investments.

ADQ, established in 2018, had total assets worth $225 billion as of June 30. It has shareholdings in more than 25 portfolio companies across seven economic clusters which cover vital sectors of the Abu Dhabi economy.

“While other SWFs in the region combine all mandates under the same umbrella, the Abu Dhabi approach is characterised by several SWFs with different strategies, different mandates,” the report found.

The emirate’s public capital, including assets managed by central banks, pension funds, and family offices, is projected to grow from $2.3 trillion today to an estimated $3.4 trillion by 2030, the SWF Global report revealed.

Besides vast assets, Abu Dhabi's SWFs also employ more than 3,100 professionals, highlighting a role as a hub for both capital and talent, the report said. It is followed by Singapore, Riyadh, Kuala Lumpur and Dubai, each of them with SWFs that have more than 1,000 employees.

Region-wise, Middle East and North Africa SWFs are top globally with nearly $5.3 trillion in capital, followed by Asia ($4.2 trillion), Europe ($2 trillion), Oceania ($450 billion) and North America ($350 billion).

SWF-managed capital is “shifting and expanding in certain cities in the world”, said Diego Lopez, founder and managing director of Global SWF.

“The world ranking confirms the concentration of sovereign wealth funds in a select number of cities, underscoring the significance of these financial hubs on the global stage.”