By Tom Arnold
Firm, formerly ADIC, launched fund last month to invest in UAE stock markets.
Invest AD - formerly known as the Abu Dhabi Investment Company (ADIC) - said on Monday it had raised over $100m for an equities fund it launched last month to invest in the UAEs' stock markets.
The investment in the fund reflected surging interest from international and local investors in undervalued UAE stocks, said the company, which this month launched three further equities funds to take advantage of outperforming economies in the Middle East and North Africa (Mena) and Africa regions.
Originally formed 32 years ago under the name ADIC as an investment vehicle of the Abu Dhabi government, the business remit of the firm - which changed its name to Invest AD last month - has developed to include the management of third-party money.
"International investment portfolios are often seriously under-weighted in this region," said Invest AD chief executive officer Nazem Fawwaz Al Kudsi. "This is usually not a matter of strategy but a result of a lack of good research and limited access to the market. Our funds can help to redress that imbalance."
While global and emerging market stocks were trading at about 7.8 and 14.5 times earnings respectively, UAE stocks were trading at about 7.8 times earnings, the firm said.
In addition, it said UAE stocks were also trading at a slight discount to book value, compared to global and emerging stocks, which were priced on average over 1.5 times book value.
"UAE stocks are undervalued, and international and local investors see opportunity," said Mohammed Salih Al Hashemi, head of investment management at Invest AD.
The UAE equities fund will be invested across the Abu Dhabi Securities Exchange, Dubai Financial Market and NASDAQ Dubai.
The other three funds launched by Invest AD were the GCC equities fund, the Mena equities fund and an emerging Africa equities fund to tap economies with fast growing, young populations and where governments were heavily investing in infrastructure.
A subsidiary of the Abu Dhabi Investment Council, Invest AD operated for three decades as an investment arm of the emirate’s government, before expanding its business by offering investment opportunities to institutional investors including companies, pension funds, wealth managers, banks, insurance companies, investment platforms and other governments.