It’s not every day you get to sit down and read an in-depth interview with one of the Abu Dhabi Investment Authority’s portfolio managers. Today, however, is one of those days: Saeed Al Hajeri, Executive Director of ADIA’s well-respected Emerging Markets Department, has given a long and interesting interview to CFA Magazine this month. For anybody that has even a marginal interest in SWFs, consider this required reading.
I know what you’re thinking: since we are reading this interview direct from ADIA’s website, the communications team has probably added so much polish to everything (and vetted every single word in the interview) that there’s nothing left of interest. Actually, while I agree that the communications team has probably done a fair bit of polishing, the interview is still interesting. In fact, it’s fascinating.
Saeed Al Hajeri covers a wide range of topics, from the fund’s emerging market investment strategy and infrastructure focus to its participation in the Santiago Principles. However, what I was most interested to read about was the fund’s focus on talent management. Here is Mr. Al Hajeri on the topic:
“It sounds like a cliché, but our strength really is our people. And ADIA devotes considerable time and resources to ensuring that we not only attract the best local and international talent but also that we are able to motivate and retain them.”
Actually, it doesn’t like a cliché to me at all. I recently had a conversation with an EVP at a large government fund, and he told me that what was in the heads of his employees was the single most important factor in his fund’s success or failure. As he put it, if you can’t attract, incent and retain the necessary talent, then you can’t expect to manage money successfully in global financial markets. So, this begs the question: What is ADIA doing to attract and retain the necessary talent?
A lot of things, actually, but one of its priorities has been to develop local staff. After all, two-thirds of the professionals at the fund are currently foreign, so the SWF has made it part of its mission to nurture local talent and bring this percentage down. Remarkably, this includes spotting promising youths and nurturing their talents from secondary school through university:
“ADIA is firmly committed to developing local talent. Our scholarship program reaches back into United Arab Emirates schools to identify, develop, and track students at an early age who we believe have the potential to be leaders of the future. We actually interview them and conduct psychometric testing at the high school level. From there, we monitor them. We get a quarterly report and have a dedicated department, following up on them and making sure they are doing their studies. Upon graduation, selected students are sponsored by ADIA to attend universities, usually in the United States or Europe, after which an assessment is made by both parties as to their interest and suitability for a career at ADIA.”
For the sci-fi types out there, I’d call this an “Ender’s Game”-type human resource strategy. You spot remarkable children, and you develop them throughout their lives until they are ready to take up the challenging tasks central to your society’s wellbeing. And, because ADIA has an inter-generational time horizon, it can adopt a multi-decade recruitment strategy. All credit to ADIA for recognizing its long-term horizon and applying to its human resources strategy accordingly.