ABU DHABI, April 29 (Reuters) - Abu Dhabi offered a first look inside the financials of its youngest sovereign wealth fund ADQ on Monday as it hired banks for a dual-tranche dollar denominated inaugural bond.
Formally known as Abu Dhabi Developmental Holding Co, ADQ is pursuing a debt sale to help diversify its funding sources for future acquisitions, a person familiar with the matter told Reuters.
ADQ is the smallest of Abu Dhabi's three main sovereign wealth funds behind Abu Dhabi Investment Authority and Mubadala Investment Co. It was established in 2018 and is chaired by Sheikh Tahnoon bin Zayed al-Nahyan, who is the United Arab Emirates' national security adviser and the brother of its president.
Likened to Singapore's sovereign wealth fund Temasek, ADQ started out as a holding company for government assets including Abu Dhabi's ports, stock exchange and a nuclear power company.
It consolidated and privatised some of those assets, using local equity listings to build domestic champions, and then began its push into companies outside the UAE, often choosing markets battered by high inflation or currency devaluations.
The group, which includes ADQ's subsidiaries and shareholdings, reported consolidated revenue of 111.7 billion dirhams for 2023, up from 99.6 billion dirhams the previous year, according to a financial statement on its website.
The group's consolidated profit attributable to owners of the company rose to 16.1 billion dirhams in 2023, up from 11.43 billion dirhams in 2022.
ADQ is fully owned by the Abu Dhabi government which last week returned to global debt markets for the first time in three years with a $5 billion bond sale amid strong investor appetite for high grade regional credits.
The emirate has leaned on its sovereign investment funds, especially ADQ, to accelerate efforts to diversify non-oil sectors such as tourism and transportation, logistics, and manufacturing, as part of its economic transition strategy.
Citigroup, Credit Agricole, First Abu Dhabi Bank, Goldman Sachs International, HSBC and Standard Chartered are joint global coordinators and active bookrunners on the deal, which is expected to be sold in 5- and 10-year tenures, IFR reported on Monday.
The mandated banks will hold a global investor call and fixed income meetings ahead of any deal which is reported to be benchmark in size, typically understood to be at least $500 million.
ADQ has been a vehicle for the UAE's investments in Egypt, and in February signed a deal with the government to develop a prime stretch of its Mediterranean coast, slated to bring $35 billion of investment to the indebted country.
Standard Chartered (STAN)
HSBC Holdings (HSBA)