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ADIA says no plan to cut Europe exposure

Abu Dhabi, July 6, 2010

The Abu Dhabi Investment Authority (ADIA) is not planning to cut its exposure to debt-ridden Europe, saying a stable regulatory, legal and tax framework make it an attractive place to invest.

"No, (we) maintain a stable view," Jean-Paul Villain, strategy unit head at ADIA, told Reuters when asked whether the fund was looking to reduce its exposure in the face of Europe's debt crisis. "These markets are efficient," he said.

Sovereign funds, which together manage around $3 trillion of assets, are turning aggressive after cutting back their holdings in 2008 at the height of the credit crisis when they lost billions on banks such as UBS and Citigroup.

Speaking to Reuters on the sidelines of the Europlace Financial Forum in Paris, Villain said developed markets still offered attractions.
"The legal framework and tax framework is very stable. If you buy an infrastructure asset in the UK (for example), you have a clear ... structure of regulation," the former BNP Paribas executive said.

ADIA has assets of between $500 billion and $700 billion with investments ranging from Citigroup bonds to a stake in Britain's Gatwick Airport.

State-owned ADIA invests funds generated by the United Arab Emirates, the world's third-largest oil exporter, into overseas stocks and bonds as a means of diversifying away from the hydrocarbons sector.

In May, China's sovereign wealth fund said it would not cut its investments in Europe despite the fall in the euro, but would closely monitor how the continent tackles currency and regulation issues.

ADIA's Villain said the fund was constantly looking at diversifying into Europe, without specifying which assets or sectors. Villain declined to comment on whether it had been approached by British oil company BP for financial support.

The sovereign fund, known for its secretive nature, provided a rare glimpse into its investment portfolio with its first annual review published earlier this year.

North America and Europe accounted for a major chunk of investments, with about 60 to 85 per cent going to the regions. Emerging markets constituted at least 15 per cent.-Reuters

Tags: abu dhabi | ADIA | exposure |

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