Shaykh Hamed Appointed to ADIA Board as Managing Director

While WAM headlines it as a "reshuffle", this is just appointing the replacement for Shaykh Ahmed who recently died tragically.

Here's the list of the new board as per WAM.

1. UAE President (Shaykh Khalifa Bin Zayed Al Nahyan, Chairman)
2. His Highness Sheikh Sultan bin Zayed Al Nahyan, the representative of the UAE President,
3. His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces,
4. HH Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, 
5. Sheikh Hamed bin Zayed Al Nahyan, Chief of Crown Prince of Abu Dhabi's Court as a Managing Director, 
6. His Highness Sheikh Mohammed bin Khalifa Al Nahyan, Chairman of the Department of Finance and His Excellency 
7. Mohammed Habroosh Al Suwaidi, adviser to His Highness the UAE President, 
8. HE Joan (usually Ju'an)  Salem Al Dhahiri, 
9. HE Hamad Mohammed Al Hurr Al Suwaidi, Undersecretary of the Department of Finance and 
10. HE Khalil Mohammed Sheriff Foulazi, Chairman of the Board of the Central Bank.

ADIA Investment in Citigroup - Time For Conversion

When looking at ADIA's new website and its first ever annual review for 2009 (no, not financials) and reading about prudent investment strategy and their good return over the past years, I was reminded of the US$7.5 billion investment in mandatory convertible Citigroup securities.   

If I'm not mistaken the conversion date is sometime this week, at least for some of the amount.  

Earlier posts here and here and here too.

And from the annual review some interesting info:

1. Page 3: 80% of assets managed by "carefully selected" external fund managers monitored by ADIA daily.
2. Page 3: 60% of assets in index replicating strategies.
3. Page 3:  Average annual returns as of 31 December 2009.  20 Years 6.5% pa. 30 Years 8.0% p.a.
4. Page 10:  Outline of Investment Strategy.
5. Page 11:  Description of Portfolio Allocations.  Note the comment about not investing in the UAE or GCC - which by the way makes perfect sense given the mission of ADIA.
6. Page 17:  Funding including supply of funds back to the Government of Abu Dhabi.

There's more: description of manager selection process, internal departments, board committees, etc. etc. .  All in all a pretty good guide to ADIA for those who don't know much about them.  And probably some "news" even for those who think they already do.

A job well done.  And good luck straightening out that Citigroup investment.

Tie Your Camel First, Then Trust in God Part VI - The Implicit Guarantee Defense - Turnaround is Fair Play

According to the Financial Times, in deciding to make its investment in Citigroup the Emirate of Abu Dhabi "assumed the US government would make any investor in Citi whole".  They also apparently believed that "Citi is America" as the sophisticated head of another unnamed sovereign fund in the region so carefully summed up the matter.

The article also notes that ADIA plunked down US$7.5 billion after "only three days of due dilgence".

Seems it's not only sophisticated and sober investors and bankers from the West who believe in the implicit guarantee and apparently as well the Great Magic Pumpkin, though it may be lonely in the pumpkin patch at times.

Some hopefully helpful hints:

1. "Too big to fail" does not mean too big to have one's share price go down, way down.  
2. There appears to be a real unmet need in the region, particularly the UAE,  for courses in convertible bond/security basics and structuring. And thus a significant  business opportunity to be seized.
   

Earlier posts here and here.

ADIA Files Arbitration Claim to Terminate Citigroup Stock Purchase

Bloomberg reports that ADIA has filed an abitration to abrogate its obligation to purchase Citigroup stock at a price currently more than 9 times market.

Here's a more detailed report from Reuters.

As you'll recall, ADIA invested US$7.5 billion in Citicorp mandatory convertible securities in November 2007.  The strike price is a rather unattractive US$31.83 per share with the first purchases scheduled to begin in March 2010.      Earlier post here.   Citigroup is opening this morning around $3.47 share.

Another post on convertible securities and the importance of deal terms.