The Abu Dhabi Investment Authority (Adia) has opened an office in Hong Kong as the sovereign wealth fund moves beyond its traditional investment hunting grounds such as the UK.
Adia said yesterday it had opened Adia Hong Kong to act as a springboard for investment opportunities in mainland China and other key Asian markets.
The fund has appointed Dong-Sinh Ngo, who will head the Hong Kong office, as its chief representative, Asia Pacific. Adia said the office’s opening would “assist in identifying new avenues for cooperation and growth in one of the fastest developing regions in the world”.
The news comes six months after Adia signed a high-profile deal to buy a 50 per cent stake in three of Hong Kong’s plushest hotels – Grand Hyatt Hong Kong, Renaissance Harbour View and the Hyatt Regency Hong Kong. As part of the HK$18.5 billion (Dh8.76bn) deal, Adia agreed to form a joint venture company with two New World subsidiaries, which would look for further acquisitions in the tightly held Hong Kong hotels market.
“Adia has been investing and building relationships in Asia for more than three decades, with a portfolio that spans multiple asset classes. Our decision to open an office in Hong Kong is a symbol of our confidence in Asia’s continued growth and our long-term commitment to the region,” said Sheikh Hamed bin Zayed, the managing director of Adia.
Adia is not the only Middle East-based sovereign wealth fund to increased its appetite for Hong Kong assets. Last year, Qatar Holding signed a deal to buy a HK$4.78bn stake in Lifestyle International, the operator of the Sogo department stores.
Traditionally, Adia, which is tasked with the long-term investment of the emirate’s oil wealth overseas, has concentrated its interests in markets such as Europe and North America.
This month Adia paid £621 million (Dh2.77bn) for a 16.7 per cent stake in the utility SGN, formerly known as Scotia Gas Networks.
Last November, after more than 20 years, Adia took the decision to close its London office.
Property brokers say international investment funds are switching focus away from the UK, where they have historically invested the lion’s share of their cash, to Asia and the US following the UK’s historic Brexit vote this year and slowing economic growth in the UK and Europe.
CBRE reported last month that Middle East sovereign wealth funds spent just US$200m in the UK in the first half of this year – 44 per cent less than the same period a year ago – as investors worried that Brexit would force banks and other financial institutions to move their headquarters away from the City of London, leaving thousands of square feet of office space empty.
In July, Adia reported that its 20- and 30-year returns last year dropped to 6.5 per cent and 7.5 per cent, respectively, compared with 7.4 per cent and 8.4 per cent for the previous year, which it put down to the fact that exceptionally high returns during the early part of these periods had dropped out of the calculation.
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