The Abu Dhabi Investment Authority (Adia) will continue to pursue artificial intelligence-driven investment opportunities this year, as it navigates geopolitical headwinds, market volatility and global economic uncertainties.
The sovereign investor aims to diversify its approach across sectors to manage concentration risks, as it builds on the momentum that helped it deliver strong returns last year, Adia said in its 2025 annual report on Thursday.
Adia’s 20- and 30-year annualised rates of return on a point-to-point basis were 6.6 per cent and 7.2 per cent, respectively, in 2025. It was 6.3 per cent and 7.1 per cent the previous year.
The AI boom has attracted heavy investment in infrastructure, with “companies deploying capital of a magnitude rarely seen before”, Adia said.
While the push to build data centres, secure electrical transmission and expand semiconductor capacity expanded the investment universe, it has also opened up opportunities beyond the tech sector.
“This shift has significant implications for global markets,” said Sheikh Hamed bin Zayed, Adia's managing director. “The economic benefits of technological advancement – historically concentrated within the technology sector itself – are now spilling over into the broader industrial landscape.”
As this cycle matures, “we expect to see increased opportunities emerge across traditional industries, as they leverage these new tools to enhance their own productivity”, he added.
While the wave of innovation unlocks significant value, the pace at which new technology is being adopted means businesses across sectors could also face disruption.
“In such an environment, achieving investment objectives will depend less on predicting outcomes and more on maintaining a diversified, dynamic approach to capital allocation,” Sheikh Hamed said.
The defining theme of global markets in 2025 was a return to breadth and balance, in which the technology-driven gains of recent years evolved into a broader rally across asset classes.
“With inflation steadily moderating and a gradual transition towards more accommodative monetary policy, investors were presented with a supportive backdrop and a deeper pool of attractive opportunities,” Sheikh Hamed said.
Uncertainty
The fund has weathered economic crises over the decades and has honed in-house investment strategies, as well as building global partnerships to expand its investment universe across asset classes.
Adia said while economic indicators, such as corporate earnings and consumer demand, have remained resilient, the broader landscape is “susceptible to fluctuations in sentiment and policy”.
Investors are also facing uncertainty stemming from global trade dynamics as well as geopolitical tension. Returns in major equity indexes in recent years have also been driven by an “unusually narrow group of large companies” and while this concentration has delivered strong performance, it has also increased market sensitivity to the earnings and capital expenditure cycles of those firms.
“For a multi-generational investor like Adia, however, our focus reaches beyond these immediate factors,” Sheikh Hamed said.
“Our goal is to dynamically manage cyclical risks while remaining mindful of the deeper structural forces that will reshape the global economy in the years ahead.”
Portfolio of investments
Adia, which does not disclose its assets, invests on behalf of the Abu Dhabi government and is the largest sovereign wealth fund in the Gulf, with assets touching $1.1 trillion, according to consultancy Global SWF.
The authority makes direct and indirect investments in asset classes including equities, fixed income, infrastructure, private equity and property across continents.
At a portfolio level, the internally managed assets represented 63 per cent of Adia's total portfolio of investments last year, with the remaining 37 per cent managed externally, according to the annual review.
The fund’s developed equities accounted for the largest portion of Adia’s portfolio, ranging between 32 per cent and 42 per cent. Emerging market equities investments varied from 15 per cent and 17 per cent, while in private equity it was 15 per to 20 per cent.
The fund's real estate investments accounted for 2 per cent to 7 per cent of its portfolio, declining slightly due to “the relative growth of other asset classes in recent years”, Adia said.
North America accounted for 45 per cent to 60 per cent of Adia’s geographic spread of investment. Europe was 15 per cent to 30 per cent, emerging markets 10 per cent to 20 per cent, while 5 per cent to 10 per cent of Adia’s portfolio was concentrated in developed Asia.
Spree of deals
The sovereign fund has been on a deal spree in recent quarters despite geopolitical and global economic headwinds.
Last November, a joint venture between an Adia subsidiary in Landmark Properties sold an eight-property student housing portfolio to a partnership between Morgan Stanley Investment Management and Global Student Accommodation in a deal valued at more than $1 billion.
Last October, Adia said one of its wholly owned units was becoming a significant minority co-investor in Froneri, the global leader in the ice-cream sector, alongside PAI Partners and an investment vehicle led by Vintage Strategies at Goldman Sachs Alternatives.
The €3.6 billion ($4.18 billion) equity transaction established a new ownership structure for PAI’s approximately 50 per cent stake in Froneri.
In August last year, the fund said it was investing up to $1.5 billion in Singapore-based GLP to help the logistics investment company grow across markets.
Adia, through one of its subsidiaries, invested $500 million in initial capital, which will help strengthen GLP’s financial position, the companies said at the time.
