According to a survey conducted by one of the leading financial services PR firms in January 2022, the assets managed by the world’s 10 largest SWFs accounted for $7.4 trillion. Out of the top ten largest SWFs, four investment funds are from the United Arab Emirates (UAE).
Apart from the state-owned or government-backed investment fund companies, private investment companies in the UAE also see an affirmative trend in alternative investments such as private equity, real estate, and hedge funds.
As more and more independent investment funds emerge in the country, the investment opportunities they offer get more diversified.
This article provides a list of the 10 most significant investment funds in the UAE, along with an explanation of the investment funds and how they work.
What is an Investment Fund Company?
An investment company is a financial services company that invests money received by various investors in different types of securities such as shares, bonds, mutual funds, commodities, etc. Private investment companies also invest in alternative investments, while some other funds track market indexes to invest the money passively.
Sovereign Wealth Funds (SWFs)
Sovereign wealth funds are government-owned investment funds that invest in financial assets such as mutual funds, real estate, stocks, etc. These SWFs get funding from various sources, including state revenue, trade surplus, and foreign currency operations.
An investment company could be private or government-owned. A private investment company does not involve the government’s participation, whereas government-owned funds back the sovereign wealth fund.
How Do the Investment Funds Work?
When you decide to invest your money with an investment fund, they collect money from you and invest them on your behalf. Since the investment funds have extensively researched and analyzed various investments, they are in a better place to make investment decisions.
Most investment funds invest the money received from the investors in varieties of investment instruments and build a diversified portfolio for their investors. To diversify the portfolio, they handpick various asset classes such as equity, debt, commodities, cryptocurrencies, etc.
However, many investment funds also provide you an option to invest in alternative investment instruments (private equity, real estate).
Thus, investment funds take the burden of researching and studying various investment instruments and pick the best ones to invest your money across different asset classes.
That brings us to the question of which investment fund you should choose in the UAE. When multiple investment funds are available in the market, it becomes difficult for you to pick the right one.
Let’s see the top ten largest independent investment funds in the UAE, including private funds and government-backed funds.
10 Largest Investment Funds in the UAE
The UAE seems to welcome alternative investments as four of the world’s top ten sovereign management funds (ADIA, Mubadala Investment Company, The Investment Corporation of Dubai, and ADQ) are from UAE. They allocate 25%, 48% 65%, and 58% in alternative investment.
Let’s look at the top ten investment funds in the UAE to understand how many assets they manage and where they invest the investors’ money.
Abu Dhabi Investment Authority (ADIA)
Year of Establishment: 1976
Asset Under Management (AUM): $697 billion SWF or Private Fund SWF
Headquartered in Abu Dhabi, ADIA is a state-owned SWF that had the purpose of investing excess oil reserves for the government, and it manages its global investment portfolio which is spread across equities, fixed income instruments, private equities, real estate, infrastructure, and other financial alternatives.
Dubai Investment Fund (DIF)
Year of Establishment: 2001
Asset Under Management (AUM): $320+ billion SWF or Private Fund Private
Dubai Investment Fund (DIF) is a multi-sector, multi-asset investment company that invests across a wide range of sectors such as health care, industrial, blockchain, cryptocurrencies, real estate, green energy, commodities and so on.
As one of the largest global private equity funds in the world, DIF aims to effectively manage financial resources through diversification into new asset classes and growth oriented investments.
The company serves 7200+ private and institutional investors spread across 61 countries while
DIF’s core asset allocation areas are
- Multi-credit products
- International equities
- Private equity
- Real estate investments
- Infrastructure investments
- Multi-strategy investments
Thus, with an aim to create a balanced and sustainable growth, DIF seeks socially, economically and environmentally attractive investment opportunities and goes beyond short-term returns to maximize long-term returns.
Mubadala Investment Company
Year of Establishment: 2017
Asset Under Management (AUM): $284 billion SWF or Private Fund SWF
Mubadala Investment Company (Mubadala) is a government-backed investment fund company headquartered in Abu Dhabi. It was created as a merger of two investment companies Mubadala Development Company (MDC) and IPIC.
It invests capital across promising sectors and geographies for Abu Dhabi’s economic growth. The company recently acquired a controlling stake with TAQA and ADNOC in Masdar, a renewable energy company to create a more sustainable environment for the world.
Abu Dhabi Developmental Holding Company (ADQ)
Year of Establishment: 2018
Asset Under Management (AUM): $110 billion SWF or Private Fund SWF
As one of the largest and the newest SWFs in the UAE, ADQ is the government’s strategic investment partner and an active investor. The fund invests across sectors locally and internationally by bringing the high-performing companies’ development to build a better and sustainable society in the UAE.
The Investment Corporation of Dubai (ICD)
Year of Establishment: 2006
Asset Under Management (AUM): $300 billion SWF or Private Fund SWF
The ICD roots back in 2006 to manage the government of Dubai’s commercial companies and investment portfolio. It also contributes to the long-term development of Dubai by providing strategic oversights to create and implement investment strategies and corporate governance.
Banking and finance, transportation, hospitality and leisure, and real estate companies are major sectors IDC invests the money into, among others. The company is also concerned about the ESG (Environmental, Social, and Governance) investing to make responsible investing.
Binghatti developers, aka Binghatti holdings, was founded in 2008, and today it is one of the largest holding companies in the UAE focusing more on real estate investments apart from other sectors. It aims to make property development an identifiable and iconic investment instrument for the world at large.
The company also promotes diversification strategies by considering investments in food and beverage, hospitality, industrial, fast-moving consumer goods (FMCG), and design sectors.
Dubai Investments (DI)
Incorporated in 1995, Dubai Investments is a listed investment company with a share capital of
$1.16 billion. The company invests across countries in multiple sectors, including real estate, industrial, finance, healthcare, and education.
The company aims to add value to the country’s economic growth by building an investment portfolio using corporate citizenship, financial resources, a network of relationships, and financial engineering.
Mubarak and Brothers Investments (MBI)
MBI is an investment company aiming to offer a quality investment experience by providing diversification across growth sectors such as engineering services, real estate, food and beverage, retail, and education.
Founded in 2003, MBI has specialized in various business opportunities spread across market segments. The company is known for its extensive experience in commercial, retail and residential real estate, and design, and project management industries.
Specializes in leasing, property management, and residential sales, Etjar Investments is among the top investment companies in UAE. The company was founded in 2000 to make property investments easily accessible to the residents of the UAE and the world at large by building the right investment opportunities that will add value to the development of society.
Al Tamimi Investments (ATI)
With a dynamic and decisive investment approach, ATI was founded in 2006 to offer investment opportunities to more significant communities by offering sustainable and responsible investing options. The company provides diversified investment options across healthcare, hospitality, education, and retail sectors.
The Bottom Line
Although the sovereign wealth funds have been the market leaders in the investment segment, the private investment companies are also growing at an accelerated pace and making a considerable impact with ESG investing.