Awqaf Abu Dhabi considers data centre investment amid push into defensive sectors

Awqaf Abu Dhabi, or the Endowment and Minors’ Fund Authority, is open to investing in data centres as part of its push into defensive sectors to help shield its assets from economic shocks, its director general has said.

The strategy aims to provide stability for the two-year-old organisation “until we can create a proper asset allocation into different sectors”, Fahad Al Qassim told The National on the sidelines of the Annual Investment Meeting Congress in Abu Dhabi.

A portion of Awqaf Abu Dhabi's capital “will have to go into” new technologies, such as those driven by artificial intelligence, Mr Al Qassim said in an interview.

Defensive sectors are defined as those that provide dividends and earnings that are stable and consistent, regardless of the economic situation. They generally include utilities, consumer staples such as food and personal care, and health care.

“Given that data centres will become a utility, it might be part of the energy and utilities programme that we will be looking into ... [as] data centre growth is huge across the world and it's becoming more of a utility that needs to be used by AI and blockchain,” he said in an interview.

Data centres would provide Awqaf Abu Dhabi with an avenue into energy and utilities, which “we need to look into because they give very stable returns”, he added.

“Companies, or I would say the backbone of AI, like data centres and service centres [are] now being grown into different parts of the world.”

Awqaf Abu Dhabi will also be training its sights on health care, banking, finance, services, education and food security, which are “the main themes for us to start with, and then slowly we [will] venture into new economy sectors”, Mr Al Qassim said.

The recent sweeping tariffs imposed by the US are also a factor in playing safe, as the situation has cast a heavy cloud of uncertainty over economies everywhere, he said.

“You cannot predict everything that happens in the future, but then there are some asset classes which have always proven as defensive sectors,” he added.

“So we invest in defensive sectors, we invest in structured products [that are] stable to some extent and give us stable returns over the coming few years.”

Health care is a major focus for Awqaf Abu Dhabi. In June last year, it launched a Dh1 billion ($272.3 million) healthcare endowment alongside Abu Dhabi's Department of Health. The deliverables of that will be revealed in May, Mr Al Qassim said.

The announcement will include the projects Awqaf Abu Dhabi has been able to fund and its beneficiaries, as well as plans for the distribution of profits, he said. Up to two new endowment projects are also being considered in 2025, he added.

“That's the main thing that we'll be working on this year. I also envisage that before the year-end, we will come with another one or two ideas for the endowments as well,” he said, without providing further details.

Awqaf Abu Dhabi will also leverage technologies such as AI to help manage its assets, including endowment files and the wealth of minors, Mr Al Qassim said.

“For us to manage this kind of wealth, we need to digitise all our processes. With AI and blockchain technologies for validation and verification purposes, this is the way to go for us,” he added, noting that this will also help manage its relationship with individuals when it comes to reporting and investments.

Awqaf Abu Dhabi was established in 2023 and operates under the emirate's Executive Council. It is mandated to regulate, preserve and develop endowed assets, and ensure the distribution of profits “to create sustainable value”, according to its website. Its current services include financial education, asset management and consultation.