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Data science for investments? The Abu Dhabi Investment Authority (ADIA) has been transforming its investment strategy over the last five years to make it a faster and more data-driven process that maximizes returns, Bloomberg reports, citing people it says are familiar with the matter.
The details: The wealth fund currently utilizes a 125-person data scientist team to guide its investment actions, with a greater focus on private credit and equity investments instead of portfolio liquidity and conservative investments such as government bonds and real estate.
The rationale: “There are now fewer market inefficiencies, traditional asset class boundaries are blurring, and opportunities are shorter-lived and require faster execution,” ADIA’s Strategy and Planning Director Jean-Paul Villain said.
ADIA poured heavy investments into private credit throughout this year, including increasing its commitment to British asset manager Cheyne Capital to USD 831 mn back in March. The wealth fund also invested USD 1 bn in Barclays and AGL Credit Management’s new private credit fund in the following month. It continued that trend with an AUD 300 mn investment in Australian real estate private credit company Qualitas Diversified Credit Investments. It also invested an undisclosed amount in a South Korean real estate credit fund managed by alternative asset manager SC Lowy two months ago.
It was among the first movers: “We have been able to quickly scale into private credit while conditions are favorable, without adopting a one-size-fits-all approach across asset classes,” said Hamad Shahwan Aldhaheri, executive director of private equities.
The wealth fund has also introduced an internal performance assessment strategy called total portfolio management. This new method shifts away from a relative return focus with individual departmental targets to absolute and total return elements for assessing performance — meaning outperformance of a benchmark is not the only metric it uses.
