ADIA raises targets for private equity, hedge funds

Abu Dhabi Investment Authority, the roughly $1 trillion sovereign wealth fund, raised its target allocations to hedge funds and private equity in its 2025 annual review. The fund set a target range of 7–12% for financial alternatives and 15–20% for private equity.

The review expanded the financial alternatives range, which covers hedge funds and related strategies, from 5–10% to 7–12%. The private equity target was increased from 12–17% to 15–20%.

Target ranges for real estate were reduced to 2–7% from 5–10%, while the review noted the fund’s absolute exposure to the asset class remained broadly unchanged. The rebalancing shifts emphasis within alternatives to alternative credit, buyout strategies and hedge funds without materially changing current property holdings.

The review attributes the policy adjustments to a recovery in buyout activity and higher market volatility that can affect active strategies. It did not provide timing or details of specific asset-level moves.

Performance figures in the review showed modest improvement in long-term returns. The fund’s 30-year annualised return rose to 7.2% from 7.1% a year earlier, and its 20-year annualised return increased to 6.6% from 6.3%.

The document also recorded that global private-market exit volumes exceeded $1 trillion in 2025, the first time since 2021, and that initial public offering activity reached its highest level since the 2020–21 period.

The updated target ranges establish the fund’s strategic framework for portfolio construction and risk exposure over coming years. ADIA manages diversified investments across public and private markets and periodically updates targets to reflect market conditions and long-term objectives.