There are more connections between Abu Dhabi and France than you might expect: French university Paris-Sorbonne launched an outpost in the Emirate six years ago, while the Louvre museum is set to open its Middle Eastern branch there in 2014. President Sarkozy established a new military base in Abu Dhabi during his penultimate year in office, but for readers of aiCIO, the most important link lies within its sovereign wealth fund.
Jean-Paul Villain is head of strategy at the Abu Dhabi Investment Authority (ADIA), one of the largest pools of capital in the world. He has overseen the strategy governing the fund’s investments since the mid-1990s. Notoriously enigmatic, ADIA does not disclose its assets under management, but they are widely estimated to total at least $600 billion. Parisian Villain has only had two employers in the last 40 years. Straight from a degree in politics, economics, and sciences (applied mathematics), he joined French bank Paribas in 1971, progressing from portfolio manager to head of investments in the asset management arm. At the start of the 1980s, he moved to ADIA only to be stolen back by the French bank five years later. Another five years on, Villain made the permanent move to ADIA where he climbed up the ladder to sit on the fund’s strategy committee.
The Frenchman has the dubious honor of being mentioned in diplomatic cables between the United States’ embassy in the Emirate and powers-that-be in Washington, DC. In messages dating back to 2006, the cables show Villain as one of the main sources of information about the nation’s economic outlook to the US, along with a schematic of the fund’s strategy. One message from 2009 tells of how Villain and another ADIA official had been reluctant to shift out of equities into more secure investments as the financial crisis took hold. Despite being out-ranked by those suggesting a more cautious view, Villain’s optimistic approach prevailed—helped in no small measure by a fairly constant stream of oil revenues being invested in US Treasuries—and the fund remained in a healthy position.
Under Villain’s watchful eye, ADIA avoided the toxic assets that infected the financial system in the run up to the financial crisis by ignoring subprime investments and most corporate debt. In its most recent annual report, ADIA showed it has a well-diversified portfolio spanning traditional and alternative asset classes.
It is not just ADIA that receives Villain’s expertise though; he also sits on the Abu Dhabi Benefits and Retirement Fund’s Investment Committee and the EDHEC-Risk Institute’s International Advisory Board.
In 2007, he was made a knight of the French Legion of Honor for enhancing France’s image around the world. Ironically, as is the case for all recipients, Villain had to purchase the medal himself. –EHP