Sovereign Wealth Fund Staff Churn, NBIM Grows

July 20, 2015 by Loch Adamson

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Abu Dhabi Skyline

Several sovereign wealth funds made high-profile appointments in the last month. Two Libyan factions coordinate fund's lawsuits against Goldman Sachs and Société Générale. Norway SWF manager expands its footprint.

Changes at ADIA

The Abu Dhabi Investment Authority (ADIA) lost another key executive as private equity head Hareb al-Darmaki left the $621 billion fund. Hamad Shahwan al-Dhaheri, who previously served as deputy director of the department, took over from Al-Darmaki, who had been with ADIA since its establishment in 1976. Al-Darmaki will serve as an advisor to the fund's chief executive, Sheikh Hamed bin Zayed al-Nahyan, and is continuing in his role as deputy chairman of ADIA's investment committee. ADIA’s former European director of infrastructure, Simon Eaves, who resigned at the end of last year, resurfaced at Zug, Switzerland-based Capital Dynamics, an asset management firm, as head of its European clean energy and infrastructure team. 

ADIC Management Shuffled

The Abu Dhabi government appointed crown prince Sheikh Mohammed bin Zayed al-Nahyan as the new chairman of the Abu Dhabi Investment Council (ADIC) as the fund announced a shuffle of its board at the end of June. The Sheikh, who also serves as chairman of Mubadala Development Co., replaced United Arab Emirates President Sheikh Khalifa bin Zayed al-Nahyan at the head of the ADIC. The fund also hired Isa Mohammed al-Suwaidi, who sits on the board of some of Abu Dhabi's largest financial institutions, as a managing director. He replaces Khalifa Mohammed al-Kindi, who had served as managing director since ADIC started in 2007. 

IPIC Names Supervisory Board Head

The International Petroleum Investment Co. (IPIC), another Abu Dhabi sovereign wealth fund, named Suhail Mohammed al-Mazrouei, U.A.E. energy minister and IPIC managing director, head of its supervisory board. The appointment aims to improve governance at the fund, which faced a pair of recent controversies. IPIC’s former CEO Khadem al-Qubaisi was replaced in April amid accusations of conflicts of interests at the fund. Al-Qubaisi allegedly used Luxembourg-based shell companies to secure deals with Spanish businesses owned or connected to IPIC. 

APFC Acting Head to Continue

Alaska Permanent Fund Corp. (APFC), which manages the U.S. state's $51 billion sovereign wealth fund, on July 1 confirmed that its CFO, Valerie Mertz, will continue as temporary executive director following the resignation of long-serving CEO Michael Burns a month earlier for health reasons. APFC's Board of Trustees had originally appointed Mertz as acting executive director for 30 days following Burns' departure, but she will continue to lead the fund until a permanent replacement is found.

NBIM Expands in New York, Plans Tokyo Office

Norges Bank Investment Management (NBIM), the arm of the central bank that manages Norway's Government Pension Fund Global (GPFG)  is reportedly adding capacity to its New York office. NBIM has reportedly expanded threefold in its 505 Fifth Ave. office on the corner of Fifth Avenue and East 42nd Street. NBIM has invested $8 billion in U.S. real estate in the last two years as it strives to reach a 5 percent allocation to real estate in its $880 billion portfolio. 

NBIM also plans to open an office in Tokyo this year as it targets the booming Japanese real estate market. NBIM, which is hiring a team to staff the new office, is expanding into Asia as a way to diversify its real estate portfolio. NBIM announced at the beginning of the year that it was on track to allocate 1 percent of GPFG to direct real estate investments in 2015 and 2016. NBIM already has branches in Hong Kong, Shanghai and Singapore and is likely to source the real estate deals in the Asia-Pacific region from those offices.

Libya’s Two Factions Agree on Action

The two factions competing for control of the Libyan Investment Authority (LIA) have successfully applied to London's High Court for a receiver to handle the fund's lawsuits against Goldman Sachs Group and Société Générale. In two separate high-profile lawsuits filed in 2014, the Libyan fund is claiming that Goldman and SocGen were responsible for a combined $3.3 billion of losses on trades for the fund in 2008 and 2009. Libya's two rival governments both claim ownership of the fund but are now working together to push the case forward. LIA’s rival Tripoli- and Malta-based management teams have agreed to have accounting firm BDO appointed as receiver on the lawsuits. Enyo Law, a legal firm that quit earlier this year as the management dispute hampered progress, is now expected to return to handle the litigation. 

Egypt Readies Fund

The Egyptian government is reportedly ready to establish a 5 billion Egyptian pound ($655 million) sovereign wealth fund in its 2015-2016 budget, according to statements from Planning Minister Ashraf al-Arabi. The government approved a proposal to set up the so-called Amlak Fund under the management of Egypt’s central bank, the National Investment Bank. The fund, which will have a board of trustees headed by the prime minister, will aim to attract foreign direct investments in major infrastructure projects in  sectors such as energy and transportation, including railways and roads. 

KIA London Office Scrutinized

A Kuwaiti parliament's financial committee will soon travel to Britain to examine the London arm of the Kuwait Investment Authority (KIA). Like other sovereign wealth funds in the Gulf, the $592 billion KIA has come under increased scrutiny as government budgets come under pressure as a consequence of sharply lower oil prices. "The first trip will happen after Eid," on the third week of July, Faisal Shaya said to Reuters news agency, referring to the Muslim celebration of Eid al-Fitr on July 17.

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