Abu Dhabi SWF says 'ready' to buy more hotel assets

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Abu Dhabi Investment Authority's HQ.

Abu Dhabi Investment Authority's HQ.

The Abu Dhabi Investment Authority is ready to purchase more real estate hotel assets as the right opportunities appear, according to its head of hospitality.

ADIA, one of the world's largest sovereign wealth funds, continues to see the United States as a viable investment option, but is also looking elsewhere around the globe, said Mike Goodson in comments published by Hotelnewsnow.com.

Speaking during the HotelsWorld Australia New Zealand conference, Goodson was quoted as saying: “We’re always very likely to be a net investor as long as our overall fund keeps growing. Given the world situation, that should happen.

“We don’t have to invest. If the market situation isn’t right, we could sit tight. We could go two years without doing anything if necessary. If the right opportunity comes along, we’ll be there,” he added.

Headquartered in the capital of the UAE, ADIA manages the surpluses of Abu Dhabi's earnings from oil exports and has assets estimated at $773 billion by the Sovereign Wealth Fund Institute.

ADIA invested heavily in North America in 2010 and early 2011 and has not ruled out further investments but Goodson was less upbeat about Europe.

“Europe is still a challenge,” he told the website. “You would think that the major key cities would generate opportunity, but we’re just not seeing it yet. There are a few things that might come together, but it’s not the opportunity we thought would arise.”

Real estate investments comprise about 7 percent of ADIA’s portfolio and earlier this year, the fund acquired three Edition hotels from Marriott International. In September 2013 it acquired 31 properties in Australia from Tourism Asset Holdings Limited for $750 million and bought 42 Marriott-branded hotels in the United Kingdom in early 2013.

Goodson told Hotelnewsnow that the company’s acquisition strategy is to focus on major key cities.

Earlier this month, ADIA said it is bullish on infrastructure and alternative investments in 2014, after reporting its 20-year annualised returns fell last year.

Publishing its annual review for 2013, which provides rare insights into ADIA's broad strategy, the fund said alternative investments - those outside mainstream areas such as equities and bonds - achieved their overall target last year. Its hedge fund portfolio delivered strong results despite challenging market conditions.

That trend will continue into this year as global economic conditions stabilise, the fund said.

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