Adia to buy stake in UK pension firm from JC Flowers

Abu Dhabi Investment Authority, the world’s third biggest sovereign wealth fund, agreed to buy a stake of up to 21.4 per cent in the UK’s Pension Insurance Corporation Group from funds advised by private equity firm JC Flowers.

The acquisition by Adia’s private equity department is subject to regulatory approvals, the wealth fund said in a statement yesterday, without providing a value for the deal.

The investment is part of the fund’s “ongoing strategy to seek out principal investments in market-leading businesses with strong management teams”, said Hamad Aldhaheri, executive director of Adia’s private equities department.

The purchase is the department’s latest principal investment and Adia’s latest in a string of purchases in the United Kingdom.

Adia’s UK investments include a 15 per cent stake in London’s Gatwick Airport, the world’s busiest single-runway hub, and a 9.9 per cent stake in Britain’s biggest water utility company, Kemble Water Holdings, the parent of Thames Water.

PIC Group is an insurer and provider of bulk annuities to UK corporate pension schemes, with more than £25 billion (Dh121bn) in financial assets. The Abu Dhabi fund dedicates 2 per cent to 8 per cent of its portfolio to private equity, according to its 2017 annual review.

Its private equities department targets five main sectors including financial services, health care and industrials. The sovereign wealth fund posted higher gains in 2017 as global equity markets rallied to record highs amid buoyant economic growth around the world. The fund was established to help diversify the economy by investing billions of dollars globally in mostly non-oil sectors.

Adia was advised on the transaction by Credit Suisse, EY, Oliver Wyman and Allen & Overy.

JC Flowers was advised on the transaction by Evercore and Paul, Weiss, Rifkind, Wharton & Garrison.