Abu Dhabi to shift $27B out of sovereign wealth fund: report

Emirate seeks to cover massive deficit caused by low oil prices

TRD New York /
Feb.February 03, 2016 12:45 PM

Abu Dhabi, facing huge budget deficits, will likely transfer as much as $27 billion out of its sovereign wealth fund – the Abu Dhabi Investment Authority – into the government treasury, according to a report by Fitch Ratings.

ADIA, the largest sovereign wealth fund in the Middle East, has over $850 million in New York City real estate holdings.

The emirate has taken major hits to its government revenues as oil prices have tanked over the past year, along with other major oil producers such as Russia and Saudi Arabia.

Abu Dhabi plans to cover some of that shortfall by drawing from ADIA, which had an estimated $502 billion in assets at the end of 2014. That number is set to drop to about $475 billion by the end of 2016, according to Fitch, thought it’s likely to recover again in 2017, Bloomberg reported.

The move is not unprecedented. The government has taken funds out of ADIA “infrequently and usually during periods of extreme or prolonged weakness in commodity prices,” according to the fund’s annual report.

The fund teamed with the Related Cos. and Singapore’s sovereign wealth fund back in 2014 to purchase a 1.1-million-square-foot office condo at the Time Warner Center. The partners paid a combined $1.3 billion.

Last year, ADIA bought the New York Edition hotel at 5 Madison Avenue in the Flatiron District for $343 million and the London NYC at 151 West 54th Street in Midtown for $382 million.

Tom Arnold, head of ADIA’s real estate business in the Americas, recently talked down the use of EB-5 financing, calling it “really controversial,” and a “cheap ticket” to American citizenship.

The Real Deal surveyed sovereign wealth activity in the city in it’s January issue. [Bloomberg]Ariel Stulberg


Related Articles

arrow_forward_ios
The coronavirus has been crushing global real estate investment for months, but there are a couple of sectors weathering the storm (iStock)

Here’s how much Covid has crushed global RE investment

Here’s how much Covid has crushed global RE investment
Global private real estate investment continues to fall as the coronavirus continues to force economics to a standstill. (Credit: iStock)

Private real estate investment deals tumble worldwide

Private real estate investment deals tumble worldwide
LA is one of the trickiest cities for institutional investors to understand. Here’s why

LA is one of the trickiest cities for institutional investors to understand. Here’s why

LA is one of the trickiest cities for institutional investors to understand. Here’s why
Cheung Chung Kiu is no stranger to big real estate deals (Credit: Wikipedia)

Mysterious billionaire who bought $262M London mansion is obsessed with blockbuster real estate deals

Mysterious billionaire who bought $262M London mansion is obsessed with blockbuster real estate deals
Crown Prince Sheikh Mohammed bin Zayed Al Nahyan of Abu Dhabi, Softbank CEO Masayoshi Son, and former British Prime Minister Tony Blair (Credit: Getty Images)

Masa Son, the crown prince of Abu Dhabi and Tony Blair walk into a bar and decide to build a $34B city in Asia

Masa Son, the crown prince of Abu Dhabi and Tony Blair walk into a bar and decide to build a $34B city in Asia
56 Leonard Street (Credit: iStock)

He invested more than $130M into 4 Manhattan condos. Now he’s taking a hit

He invested more than $130M into 4 Manhattan condos. Now he’s taking a hit
Clockwise from top left: New York, Jakarta, Shanghai (inset), Vancouver and Manila (Credit: iStock)

These were the world’s hottest luxury markets in the 2010s

These were the world’s hottest luxury markets in the 2010s
Ian Gillespie and A rendering of the Oakridge development (Credit: Very Polite Agency via Bloomberg)

Vancouver’s most hated developer on his version of Hudson Yards, the city’s “piece of shit” buildings

Vancouver’s most hated developer on his version of Hudson Yards, the city’s “piece of shit” buildings
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...