The Abu Dhabi Investment Authority is delaying the sale of $2 billion in private-equity fund stakes after the outbreak of the deadly coronavirus.
The sovereign wealth fund, which is estimated to have about $580 billion under management, was in talks with several investors including money manager Ardian about selling chunks of the portfolio, according to people familiar with the discussions. The market turmoil triggered by the crisis made it difficult for them to agree on how much the stakes were worth, said the people, who asked not to be identified because the talks are private.
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ADIA plans to restart the sales process in the second half of the year, one of the people said. Spokespeople for ADIA and Ardian declined to comment.
The fallout from the coronavirus pandemic is roiling companies owned by private equity funds and has hurt the niche business of buying and selling buyout stakes — known as secondary transactions. Deals have started to dry up amid estimates that portfolios will drop in value by as much as 50% in the first half of the year. Some investors have walked away from secondary deals that were close to being signed, according to Steve Lessar, co-head of secondaries and liquidity solutions in BlackRock Inc.’s Private Equity Partners business.
Large investors like ADIA often end up with a multitude of investments run by different private-equity managers, making them cumbersome to administer. The Gulf fund had sought to sell its private equity portfolio as part of a push by global investors to invest directly in companies and cut costs.
ADIA is the third-largest sovereign wealth fund in the world, according to data compiled by the Sovereign Wealth Fund Institute. Like other wealth managers in the region, the Abu Dhabi fund is bracing for the impact of falling oil prices.
PJT Park Hill was advising on the transaction, Bloomberg News reported in January