The Abu Dhabi Investment Authority, which manages around $1tn in assets, plans more investments in the private equity sector, underlining its clout as a globally influential dealmaker.

ADIA last year boosted it targeted allocation to private equity to 12%-17% of its overall portfolio, according to its 2023 annual review published on Thursday. That was up from 10%-15% a year earlier. The allocation to all other asset classes, including developed market equities or real estate, remained unchanged.

The fund’s increased focus on private equity comes as rising interest rates last year damped dealmaking activity in the sector which plunged to its lowest level in five years, according to the review.

Despite the challenges, ADIA’s private equity department made over 20 direct investments of more than $150mn. It also invested in some of its existing portfolio companies to support growth opportunities including acquisitions, it said.

Last year’s market dislocation also meant that private creditor providers increasingly play a major role in funding leveraged buyouts, according to the report. ADIA made further inroads in that space, anchoring several investments in platforms such as Jefferies Credit Partners’ Direct Lending BDC and Overland Advisors, a partnership between Centerbridge and Wells Fargo that’s focused on non-sponsored middle-market direct lending.

“Overall, ADIA was well positioned to capitalise on the strong gains in parts of these markets, while benefiting from dislocations in areas where conditions were more challenging,” said ADIA’s managing director Hamed bin Zayed al-Nahyan.

ADIA’s widening interest in private equity and credit is one of the many ramifications of the fund’s internal overhaul that took place in recent years.

The investment behemoth adopted a more data-driven approach by reorganising departments and setting up an in-house team staffed with more than a hundred artificial intelligence, computing and math scientists with the aim of making the entire fund more nimble and faster in its decisions.

ADIA is one of several Abu Dhabi sovereign entities that combined manage almost $1.7tn in wealth, according to consultancy Global SWF. That’s helped the emirate’s financial centre attract some of the biggest international names in asset management and investing.

“In private equity, for example, ADIA has leveraged its often decades-long relationships in the sector to broaden and deepen how it accesses the sector, and ultimately enhance returns,” said Hamed bin Zayed al-Nahyan.

In the first three quarters of the year, ADIA and Abu Dhabi’s two other main funds together invested $36bn across the globe, according to data from Global SWF.

Looking forward, ADIA in its review pointed to the various elections that took place around the globe, saying that voters’ decisions will have significant impact on domestic policy and relations between countries.

Even as financial systems worldwide could again prove resilient to geopolitics, “this is no cause for complacency, as an unpredictable outlook often has real-world outcomes that eventually cascade down to financial markets,” Hamed bin Zayed al-Nahyan said.