ADIA wants more hedge funds and private equity "irrespective of size" as its allocation to alternatives rises

The Abu Dhabi Investment Authority's 2025 Review, published on 10 September, raises the allocation range in their portfolio for financial alternatives (hedge funds and related strategies) to 7-12% from 5-10%. It lifts private equity to 15-20% from 12-17% and cuts real estate to 2-7% from 5-10%. With the portfolio estimated at $1tn to $1.1tn, "Even a single-percentage shift in strategy represents around $11 billion" (Semafor).

Managing Director Sheikh Hamed bin Zayed Al Nahyan said ADIA "increased allocations to systematic and absolute-return strategies to enhance its risk-adjusted returns and manage periodic bouts of volatility" (Reuters).

ADIA's Alternative Investments Department splits the book into diversifying strategies (systematic and discretionary macro) and return-enhancing strategies (event driven, equity hedge and relative value). It says it welcomes "dialogue with new and innovative managers, irrespective of size". Its mandate "ranges from large investments in globally recognised managers" to seed-type allocations, plus an Emerging Opportunities mandate.

ADIA is not alone in this outlook. Stichting Pensioenfonds Mars, a €1.5bn Dutch scheme, lifted hedge funds from 11% to 21% of its portfolio during 2025 (Hedgeweek, 7 September). In BNP Paribas' survey of 175 hedge fund investors, 49% of European respondents plan to increase hedge fund allocations, led by equity long/short, discretionary macro and equity market neutral.