ADQ, the Abu Dhabi-based investment and holding company, and International Holding Company, a diversified conglomerate based in the capital, have announced plans to create the region’s largest multi-asset class investment manager.
The new entity, based in Abu Dhabi, will manage a portfolio of assets from ADQ’s Alternative Investments platform, the Abu Dhabi Growth Fund and IHC, as well as new capital from founding shareholders and future investors to be used globally, ADQ and IHC said.
It is expected that all ADQ, ADG and IHC capital earmarked for alternative investments will be put to use by the new investment manager.
Global private equity company General Atlantic will also join as a strategic investor and partner.
“Today’s announcement demonstrates our intention to create the largest independent alternative investment manager from the region that will serve global markets, with a clear remit to maximise long-term returns”, said Mohamed Alsuwaidi, managing director and chief executive of ADQ.
Through a series of new funds, the new entity will invest in alternative assets, including private equity, venture capital, private credit and public equities.
It will invest through a combination of commitments to top-tier global funds (a fund of funds strategy), direct investments (including private equity and venture capital), credit and co-investments.
The global alternatives industry is growing, with assets under management expected to nearly double to $23.21 trillion by 2026 from an estimated $13.32 trillion at the end of 2021, according to a report by investment data company Preqin.
Growth will be mainly driven by private equity, with assets under management for the asset class forecast to increase to $11.12 trillion in 2026 from an estimated $5.33 trillion at the end of 2021, the report said.
“The investment philosophy of the manager will be underpinned by a fundamentally driven, high conviction approach to invest across multiple sectors and geographies to achieve superior risk adjusted returns for its investors,” ADQ and IHC said.
The funds will invest across the capital structure and asset life cycle — from early stage venture capital to growth and scale-up equity — through to mature and established businesses.
“Research is showing the global market for alternative investments will continue to grow in the next five years,” said IHC chief executive Syed Shueb.
“With these positive indicators, we believe there is a compelling opportunity to invest at scale.
“There is no doubt this new joint venture will enable the new investment manager to access a diversified regional and global pipeline of investments, manage long-term capital on behalf of its investors and become a leading institutional investor and partner of choice.”
IHC, which plays a key role in supporting the diversification of the UAE economy, invests in agriculture, brokerage and financial services, entertainment, health care, industries, entertainment, retail, real estate, energy and maritime industries.
The conglomerate, which has more than 422 subsidiaries, including Alpha Dhabi Holding, Q Holding, International Securities, Al Seer Marine and Multiply Group, has made several strategic investments in recent months to further expand its asset base.
The company has grown to become one of the most valuable listed holding companies in the Middle East and had total assets of Dh227.5 billion at the end of 2022, up from Dh88.98 billion at the end of 2021.
Established in 2018, ADQ also has a broad portfolio of major enterprises with investments in energy and utilities, food and agriculture, health care and life sciences, and mobility and logistics.
The new investment manager will manage funds on behalf of ADQ and IHC at launch, but is structured to also raise and manage third-party capital, including from institutional investors, pension funds, family offices and other private and public firms.
The investment manager also aims to add further international offices in North America, Europe and Asia, the statement said.
New York-based General Atlantic, which will join ADQ and IHC as an anchor investor in the new manager, is expanding its presence in the Middle East.
General Atlantic has been investing in the Middle East since 2015, ploughing more than $400 million into the region, including its investments in Property Finder, an online property platform in Dubai, and Network International, a Middle East and Africa-focused payments solutions provider.
The company, which invests in growth companies and manages about $73 billion in assets globally, also recently appointed Samir Assaf as chairman of its Mena business.
"This new investment manager will play an important role in strengthening Abu Dhabi’s position as an emerging global financial centre", said William Ford, chairman and chief executive of General Atlantic.
With "rapidly maturing capital markets, deep pools of liquidity and a sophisticated investor ecosystem", Abu Dhabi’s financial services industry is at an inflection point, ADQ and IHC said.
"The launch of the new manager is strategically timed to capitalise on these secular trends."