In keeping with our prudent culture, identifying and managing risk plays a central role in every stage of ADIA’s strategic and day-to-day decision making.
ADIA’s risk management framework is holistic in nature, having been designed to comprehensively identify and analyse all types of risks across asset classes and ensure that any potential issues are managed efficiently and effectively.
The Managing Director has ultimate responsibility for ADIA’s risk management, with assistance and advice from several committees and departments, including the Investment Services Department, Strategy & Planning Department, Evaluation & Follow-Up Division, Internal Audit Department, and Legal Division.

Governance
The Risk Management Committee (RMC) oversees the effective implementation of ADIA’s risk management framework and ensuring that all risks are addressed by relevant departments in a timely manner. It seeks to facilitate a proactive dialogue between all senior risk executives in order to help protect ADIA from unexpected loss of capital or calls for liquidity, failure of key operational processes, or reputational damage. Other key objectives of the RMC include ensuring alignment of departmental risk activities with ADIA’s risk appetite and overall risk framework, and serving as a conduit for the escalation of risk issues arising from within or across departments.

Risk Management
At ADIA, we believe that managing risk is a core responsibility of all employees. Risk management is embedded in all of ADIA’s investment and related activities, from asset allocation to investments in individual asset classes and ultimately to trade execution.
The Investment Services Department and the Strategy & Planning Department, working closely with investment teams, are responsible for protecting ADIA’s assets and adding value to the investment process through performance analysis and core risk management responsibilities. These entail leading the disciplined execution of the risk management framework and promoting a culture of risk awareness.
The Departments’ risk analyses include:

  • Continuously assessing all sources of risk on both an absolute and a relative basis, including through proprietary portfolio modelling.
  • Developing a comprehensive risk assessment across all risk types, including “top-down” aggregate portfolio risk, “bottom-up” investment risk by asset class, country and counterparty risk, operational risk, operational due diligence, business continuity, and compliance risk.
  • Identifying, monitoring and escalating risk mitigation strategies to address emerging and ongoing risk issues on a timely basis.

In addition, and to ensure connectivity across ADIA, each of ADIA’s investment departments has its own risk framework. By cascading down from the ADIA-wide framework, these combine a unity of purpose with the necessary flexibility to capture risks that are unique or specific to each asset class. The Virtual Risk team – a network of risk managers within investment departments and other key functions – is an integral part of the link between the ADIA-wide and the departmental risk management frameworks.

Risk Culture
ADIA’s risk management framework is underpinned by the emphasis we place on education to support the continuous development of a culture of risk awareness across ADIA.
At ADIA, we expect our people to demonstrate the highest standards of ethics, integrity and professional competence. ADIA’s employees must adhere to a Code of Conduct that sets the standards of behaviour that are expected of them in order to preserve ADIA’s integrity and reputation and enable it to fulfil its mission.