Abu Dhabi plans private equity fund stake sale

London, UK - The Abu Dhabi Investment Authority (ADIA) is preparing to sell around US$2bn of its stakes in private-equity funds, amid an increasing push towards direct investments by the sovereign wealth fund, people familiar with the matter said.

ADIA is working with advisors at PJT Park Hill on the proposed transaction, according to the people, who asked not to be identified. It plans to start marketing the deal to potential buyers within weeks, one of the people said.

Large investors like ADIA often end up with a multitude of investments run by different private-equity managers, making them cumbersome to administer. The Gulf fund is following other major investors by taking direct stakes in firms - eschewing the fees and limitations of managed funds - to generate returns in a low-interest-rate environment.

Final details about the sale, including the portfolio size, could still change, they said.

Secondaries Investor reported in September that ADIA was considering selling an unspecified amount of private equity fund stakes, citing unidentified people.

While ADIA doesn’t divulge its assets under management, it’s estimated to have about US$696bn. That makes it the third-largest in the world, according to data from the Sovereign Wealth Fund Institute.

The fund last year said it planned to hire, mostly for investment and research-focused roles in its fixed income and treasury department, to boost active management.