Abu Dhabi has about 9 percent of the world’s oil and 0.02 percent of its population. One result is a surfeit of petrodollars, much of which is funneled into a secretive, government-controlled investment fund that is helping to shift the balance of power in the financial world….
ADIA is the largest of the world’s sovereign wealth funds, giant pools of money controlled by cash-rich governments, particularly in Asia and Middle East. But Abu Dhabi, the wealthiest of the seven Arab emirates, says little about its fund. Few outsiders know for sure where ADIA invests, or even how much money it controls. And secrecy breeds hyperbole; some estimates of the fund’s size exceed $1 trillion.
Before long, ADIA will certainly reach that mark. But for now bankers, former employees and analysts familiar with the fund peg it at $650 billion to $700 billion – an amount that is still more than 15 times the size of the Fidelity Magellan Fund. In all, sovereign wealth funds in countries like the United Arab Emirates, Kuwait, Singapore, China and Russia together control more than $2 trillion, a figure that could approach $12 trillion by 2015, analysts say.
Such riches, coupled with the more-aggressive stance being taken by ADIA and other sovereign funds, has raised concern that these investors will wield their wealth for political as well as financial reasons.
ADIA’s secrecy is also drawing scrutiny. The fund has no internal communications department, although it says it is setting one up. When sovereign fund leaders from around the world descended on Davos, Switzerland, in February for the World Economic Forum, no one from ADIA saw fit to show up.