Sheikh Ahmed bin Zayed Al Nahyan, head of one of the world's largest sovereign wealth funds and a brother of Abu Dhabi's ruler, died in an air crash in Morocco, Bloomberg reported
Sheikh Ahmed had been reported missing after a glider he was in crashed into a lake south of Morocco's capital Rabat on March 26. The United Arab Emirates, in which Abu Dhabi is the largest of seven sheikhdoms, declared three days of mourning from March 31 after announcing his body's discovery today. Sheikh Ahmed was born in 1971, according to Michael Field, a London-based expert on the Abu Dhabi royal family.
As managing director of Abu Dhabi Investment Authority, Sheikh Ahmed was in charge of investing proceeds from Abu Dhabi's ownership of more than 7 percent of world oil reserves. He ranked No. 27 on the Forbes list of most powerful people last year. ADIA managed an estimated $328 billion at the end of 2008, according to economists at the New York-based Council on Foreign Relations. Estimates of ADIA's assets range from $300 billion to $800 billion.
"We consider ADIA to be like the best financial institutions in the world," Sheikh Ahmed said in a May 2008 BusinessWeek interview at ADIA's headquarters in a 36-story Abu Dhabi office tower. "Being far away around the world doesn't mean we are far away in quality."
While Sheikh Ahmed had overall responsibility for ADIA, his death is unlikely to change its investment practices as committees of managers make key decisions.
"ADIA is an institutional body, one of the most sophisticated investors in the Arabian Peninsula," Field said. "Sheikh Ahmed's departure won't have an impact on that."
Still, Sheikh Ahmed won't be easy to replace. He was well- suited to the role of being the royal family's representative at ADIA, having served an apprenticeship there.
Sheikh Ahmed took charge of ADIA in 1997 after working for the fund for six years as a European equities analyst, according to the BusinessWeek profile. His half-brother, Sheikh Khalifa bin Zayed, is the ruler of Abu Dhabi and president of the U.A.E.
In his tenure at ADIA, Sheikh Ahmed pushed to improve the quality of his staff and to squeeze out inefficiencies that hampered performance. In 2006, he ordered his investment committee to figure out why passive investments in indexes were outperforming some of ADIA's highly paid fund managers.
ADIA hired a consultant who found, after several months, that many endowments used index funds for as much as 80 percent of their investments. Through 2007, the team conducted an extensive study of ADIA's own money managers and others in the industry, and eventually concluded that few firms that invest in developed markets such as the U.S. and Europe consistently outperform their benchmarks over the long haul.
As a result, ADIA increased the amount of money allocated to index funds.
Sheikh Ahmed declined to comment on the size of the fund in a January interview with German newspaper Handelsblatt, while citing Sheikh Khalifa as saying the higher estimates were exaggerated.
Abu Dhabi under the current ruler has accelerated a modernization drive championed by his father, Sheikh Zayed bin Sultan Al Nahyan. Sheikh Zayed presided over the transformation of a once sleepy backwater from 1966 to 2004 and founded the U.A.E. with the other emirates in 1971. Sheikh Ahmed was his 14th son, according to Field.
Within a few years of Abu Dhabi's first oil exports in 1962, Sheikh Zayed undertook a "massive program" of construction of schools, housing, hospitals and roads, according to his official biography. Abu Dhabi is now diversifying away from oil by investing in petrochemicals and other industries and building branches of the Louvre and Guggenheim museums as it pursues ambitions to become a cultural center.
ADIA has stakes in companies including Citigroup Inc., Hyatt Hotels Corp. and Saudi Arabia's Kingdom Holding. It said in February that it bought a minority stake in London's Gatwick Airport.
While the fund has tended to eschew high-profile deals unlike other Abu Dhabi funds such as Mubadala Development Co., its $7.5 billion investment in Citigroup in November 2007 was described last year by Forbes as a "disastrous bet." ADIA filed an arbitration claim against Citigroup in December seeking damages of more than $4 billion or to void the deal, as the investment required it to buy the bank's stock at around eight times the current price in four installments from March 2010.
"I do think the latest downturn has also served as a powerful reminder to all investors of the importance of risk management," Sheikh Ahmed told Handelsblatt.
The fund, which has deployed between 15 percent and 25 percent of assets in emerging markets, earlier this month published its first annual review as part of efforts to provide better disclosure and risk management. While it didn't disclose the value of its assets, it provided a breakdown of its portfolio by asset class and regions.
ADIA has global investments ranging from real estate to finance and hospitality. Global equities have averaged between 40 percent and 60 percent of ADIA's assets and fixed-income 15 to 30 percent, Sheikh Ahmed said in the January interview.
ADIA has had a 20-year annual return of 6.5 percent and a 30-year rate of return of 8 percent as of the end of last year, the annual review said.