The Abu Dhabi Investment Authority (ADIA) has updated its investment strategy in its 2025 annual review. The sovereign wealth fund increased its target allocation for private equity to 15%-20%, compared to the previous 12%-17% range. Similarly, the target for financial alternatives, including hedge funds, rose to 7%-12% from 5%-10%.
To accommodate these shifts, the fund reduced its real estate target range to 2%-7% from the previous 5%-10%. ADIA clarified that this change reflects the growth of other asset classes rather than a reduction in actual property holdings. In 2025, 63% of the fund's assets were managed internally, while 37% were handled by external managers.
The fund reported 20-year annualized returns of 6.6% and 30-year annualized returns of 7.2% for the period ending in 2025, showing growth from the previous year's figures of 6.3% and 7.1%. Managing director Sheikh Hamed bin Zayed Al Nahyan attributed the performance to equity market strength and AI-driven productivity gains.
Despite positive results, the fund identified potential risks for 2026. Sheikh Hamed noted that rapid technological changes and policy shifts could introduce volatility if regulatory frameworks fail to keep pace with AI adoption.
