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DUBAI: Abu Dhabi Investment Authority, or ADIA, one of the world’s largest sovereign wealth funds, has cut dozens of jobs over the past year as part of a billion dollar cost-cutting program dirhams ($272.29 million), two sources told Reuters.

The cost savings will help Abu Dhabi’s sovereign wealth fund, which manages $700 billion in assets, divert money to new projects such as quantitative research and development.

ADIA, which manages the capital on behalf of the oil-rich government of Abu Dhabi, has focused on shrinking its bloated management team, cutting expensive and long-serving staff who have worked there for decades, the sources said, declining to be identified because the matter is not public.

The fund had a savings target of around 1 billion dirhams which was communicated internally to management, the sources said.

A spokesperson for ADIA said the fund “continually evaluates its operations to ensure that its capabilities, structures and processes are aligned with long-term goals and allow ADIA to evolve with the investment environment”.

The changes aim to make the ADIA, which was established in 1976 to invest the emirate’s surplus petrodollars, more nimble and efficient, sources say.

The fund has focused on how to integrate investment decisions with machine learning and artificial intelligence, following in the footsteps of Singaporean public funds GIC and Temasek.

In 2020, it merged its external and internal equity teams and closed its internal Japanese equity desk.

The changes led to the creation of an equity department, the core portfolio department, as well as the Central Investment Services department.

ADIA’s measures are aimed at empowering frontline managers, consolidating technology systems and simplifying governance structures, one of the sources said.

“We expect the fund to shift slightly towards private markets and begin to allocate capital to more innovative and perhaps aggressive strategies and products,” said Diego Lopez, managing director of Global SWF, a sovereign wealth fund consultancy firm.

He said Gulf sovereign wealth funds are full of cash, after strong results in 2020 and 2021, and rising oil prices.

“We estimate that ADIA had a single-year return of 20.9% in 2020, and we expect 2021 to be very strong as well,” Lopez said.

“Such excess capital and firepower allows – and pushes – the fund to rethink its strategy and align with the new economy and new themes.”

ADIA had 1,680 employees, the fund said in its annual report last year.