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Enter, Abu Dhabi IPO FundMENA

Enter, Abu Dhabi IPO Fund

The Abu Dhabi Securities Exchange (ADX) has been on a tailwind this year with the exchange’s All Shares Index (ADI) being up by almost 54% so far into 2021. The Abu Dhabi’s Supreme Council for Financial and Economics Affairs is adding to that performance streak through its recently-launched $1.4b IPO fund.

The Council’s new fund was launched under the directive of Sheikh Khaled bin Mohamed bin Zayed and is aimed at further solidifying ADX’s position as a leading regional equities market. The fund is set to invest in up to 10 private companies per year, mainly targeting small and medium-sized enterprises. In addition to the investment, the Council will offer companies support throughout the entire listing process — from connecting IPO candidates to private co-investors to providing liquidity. The government’s emphasis on equity instruments as opposed to debt-financing ties into the broader investment-friendly initiatives that have been pushed out over the past few years.

why it matters

The ADI Index (a weighted index with all stocks listed on the exchange) reached 7.7k points for the first time this year. The International Holding Co (IHC) also intends to list six companies in its portfolio over the near term — a healthy pipeline of future IPOs indicating further growth in the index.