The Abu Dhabi Investment Authority (ADIA), one of the world's largest sovereign wealth funds, averaged annual returns of 6.5 per cent over the past 20 years, it was revealed yesterday in the fund's first-ever annual review. While those returns could be considered modest, ADIA's strategy of investing Abu Dhabi's excess oil revenues prudently over long periods has led it to put 60 per cent of its assets in indexed investments that are more conservative than active strategies, where a manager seeks greater returns.
The fund puts between 35 and 45 per cent of its assets in developed market stocks; between 10 and 20 per cent in emerging market stocks; and between 10 and 20 per cent in government bonds. Riskier asset classes, such as property, hedge funds and small companies each comprise up to 10 per cent of its portfolio. The fund also keeps up to 10 per cent of its assets in cash, the disclosures showed. ADIA made an average annualised return of 8 per cent over the 30 years ending last December 31.
It has long been suggested the fund used a "multi-manager" approach, farming out its asset management to external managers who invested along the lines dictated by the fund. ADIA revealed for the first time yesterday that 80 per cent of its assets are managed externally. Internally, its expertise lies largely in choosing the external managers best equipped for its goals. "With the publication of this, our first annual review, we aim to enhance understanding of ADIA in key areas such as governance, investment strategy, portfolio structure, our approach to risk and the lifeblood of our organisation, our people," Sheikh Ahmed bin Zayed Al Nahyan, the managing director of ADIA, said in a letter announcing the disclosures.
The fund released the details and relaunched its website to meet disclosure rules under the Santiago Principles, a set of requirements it agreed to in 2008. The principles were crafted as a response to pressure on sovereign funds, which have recently taken a larger and more visible role in global markets, to open up and make clear that their investments had no political dimension. ADIA did not reveal the size of its pool of assets and said it did not plan to.
The fund receives money from excess Government oil revenues and is ready to provide money to the Government in times of need, the disclosures said. "ADIA is required to make available to the Government of Abu Dhabi, as needed, the financial resources to secure and maintain the future welfare of the emirate," its report said. "In practice, such withdrawals have occurred infrequently and usually during periods of extreme or prolonged weakness in commodity prices."
In his letter, Sheikh Ahmed said ADIA had "increased the overall liquidity" in its portfolio starting in 2008 as a response to the global downturn, but "began in 2009 to cautiously lift our exposure to higher-growth markets, which proved effective as the recovery began to take hold". He praised global leaders for their actions in saving the financial system during the downturn and said governments and regulators "now appear committed to reducing the risk of such a crisis occurring again".
Still, Sheikh Ahmed wrote, "considerable uncertainty" remained this year as countries began to think about removing stimulus measures introduced to battle the crisis, and said the upswing "may be less pronounced than usual, at least in the more mature, developed economies". ADIA, the disclosures showed, has a staff of about 1,200 people, 36 per cent of whom are from Asia and 31 per cent of whom are UAE nationals.
It has a series of investment and support departments that make recommendations on investments and managers, according to the disclosures. These departments are overseen by an investment committee that makes decisions on proposals, a common structure for investment funds. When ADIA makes an investment, it "does not seek to manage, or be represented on the boards of, the companies in which we invest", the fund said.
As part of its adherence to the Santiago Principles, ADIA has made clear that it does not take an active role in its investments, but the fund said it did sometimes exercise voting rights conferred on it by its holdings in public companies. "In practice, this means that we usually abstain from exercising our voting rights, except in certain circumstances to protect ADIA's financial interests, or to oppose motions that may be detrimental to shareholders as a body," the disclosures said.
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Job: CEO JCDecaux Middle East
In the role: Since January 2015
Lives: In the UAE
Background: M&A, investment banking
Studied: Corporate finance
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Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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What went into the film
25 visual effects (VFX) studios
2,150 VFX shots in a film with 2,500 shots
1,000 VFX artists
3,000 technicians
10 Concept artists, 25 3D designers
New sound technology, named 4D SRL
Results
5pm: Al Maha Stables – Maiden (PA) Dh80,000 (Turf) 1,600m; Winner: Reem Baynounah, Fernando Jara (jockey), Mohamed Daggash (trainer)
5.30pm: Wathba Stallions Cup – Maiden (PA) Dh70,000 (T) 1,600m; Winner: AF Afham, Tadhg O’Shea, Ernst Oertel
6pm: Emirates Fillies Classic – Prestige (PA) Dh100,000 (T) 1,600m; Winner: Ghallieah, Sebastien Martino, Jean-Claude Pecout
6.30pm: Emirates Colts Classic – Prestige (PA) Dh100,000 (T) 1,600m; Winner: Yas Xmnsor, Saif Al Balushi, Khalifa Al Neyadi
7pm: The President’s Cup – Group 1 (PA) Dh2,500,000 (T) 2,200m; Winner: Somoud, Adrie de Vries, Jean de Roualle
7.30pm: The President’s Cup – Listed (TB) Dh380,000 (T) 1,400m; Winner: Haqeeqy, Dane O’Neill, John Hyde.
HOW TO WATCH
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
What drives subscription retailing?
Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.
The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.
The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.
The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.
UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.
That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.
Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.
