Adia widened private market allocations in 2025 as it leans into PE, hedge funds, and secondaries

Adia is making more room for private equity and hedge funds: The Abu Dhabi Investment Authority raised its long-term private equity allocation range to 15-20% from 12-17%, while financial alternatives — which include hedge fund strategies — moved to 7-12% from 5-10%, according to its 2025 annual review (pdf). The roughly USD 1 tn sovereign fund is positioning for a rebound in buyouts and greater volatility in public markets, Bloomberg reports.

The portfolio is also running more in-house: Active strategies made up 57% of its portfolio in 2025, up from 54% a year earlier, with some 63% of assets managed internally, according to the review. Developed equities remain its biggest allocation band at 32-42%, while its geographic ranges were unchanged, with North America still taking the largest share at 45-60%.

The long game improved slightly too: Adia’s 20-year annualized return rose to 6.6% at the end of 2025 from 6.3% a year earlier, while its 30-year return edged up to 7.2% from 7.1%.

Private markets get more room

The timing for private equity got friendlier in 2025: Global buyout transaction value rose 23% y-o-y to USD 2.2 tn, while large-cap transactions jumped to 52% of transaction value from 35%. Public-to-private activity climbed 67%, and global exits topped USD 1 tn for the first time since 2021, with IPO activity reaching its strongest level outside the 2020-21 peak.

But private equity still has a USD 3.7 tn traffic jam: That’s the value of assets held for more than five years. Fundraising also fell 22% y-o-y and remains more than 40% below its 2021 peak, pushing managers toward alternative liquidity routes; continuation vehicles — which let GPs move assets into new funds rather than sell them outright — accounted for 14% of exits last year.

Adia is playing both sides of that squeeze: Its private equity arm participated in GP-led secondaries and single-asset continuation vehicles, anchored a China-focused portfolio managed by CDH Investments, and leaned into take-privates including Dayforce and Hologic. On the way out, it sold stakes in Pension Ins. Corporation and IFCO, while portfolio company Medline returned to public markets in what Adia says was 2025’s largest IPO globally.

That liquidity playbook has carried into 2026: We reported in March that Adia teamed up with Ardian on a real estate secondaries platform after anchoring a USD 770 mn CDH continuation vehicle. It has also been widening its private-credit exposure, including through a significant risk transfer fund with Christofferson Robb & Company and an APAC real estate credit strategy with Dignari Capital Partners.

Hedge funds get a wider lane

Adia had a good reason to give alternatives more room: Its Financial Alternatives Department delivered strong absolute returns in 2025 with little correlation to equity markets, according to the review, as macro, relative-value and credit strategies benefited from market swings. The department also continued expanding its managed-account platform.

That managed-account push is already huge: Last year, Adia had around USD 40 bn invested across dozens of hedge funds through separately managed accounts, with the exposure rising by several bns of USD during 2025. Earlier that year, it bought a minority stake in Innocap and selected the firm’s managed-account

And it’s not just Adia chasing hedge-fund returns: Abu Dhabi Investment Council has been working toward roughly USD 15 bn of global hedge fund exposure and this summer committed around USD 1 bn to macro fund Deem Global, while Lunate has also built exposure to Brevan Howard. Abu Dhabi isn’t merely attracting hedge funds to set up shop anymore; its sovereign investors are increasingly becoming some of their biggest clients.

for parts of its hedge fund and equity exposure.

Real estate shrinks on paper

Property was the notable move in the other direction — but this isn’t a sell-down: Adia cut its real estate allocation range to 2-7% from 5-10%, while absolute exposure remained steady as other asset classes grew faster. The fund still increased exposure to US senior housing, logistics and digital infrastructure in Greater China, and European residential strategies, while expanding real estate credit and selling completed investments across the US, Singapore and Europe.

The bigger sovereign playbook

AI infrastructure is pulling capital too: Adia committed USD 600 mn to Vantage’s APAC data-center platform in 2025 and invested more than USD 200 mn alongside an industry partner in operational US data centers. It also backed a US utility and gas-fired power-generation asset as electricity demand rises alongside the AI buildout. We flagged in June that sovereign funds increasingly see private credit and infrastructure as ways to capture AI’s capital demands without simply piling further into listed megacap tech.

REMEMBER- Gulf deployment isn’t slowing down: Gulf sovereign funds invested a record USD 53.9 bn across 108 transactions in 1H 2026 despite the regional conflict, with Gulf investors involved in 21 of the world’s 42 USD 1 bn+ sovereign mega-deals.