Over the past two years, ADQ, the sovereign wealth fund of the United Arab Emirates, has been increasing its trading efforts both domestically and overseas. At the same time, as Abu Dhabi accelerates the implementation of its economic diversification plan, its ambition to enter the financial services sector is evident.
ADQ, one of the largest sovereign wealth funds in the UAE, has been in talks to acquire investment bank Lazard, reflecting the country's ambitions to enter the financial services sector.
On June 20th, according to sources cited by the Financial Times, ADQ Chairman Sheikh Tahnoon bin Zayed Al-Nahyan had negotiated with Lazard CEO Ken Jacobs earlier this year in hopes of privatizing Lazard, but the talks broke down and both sides abandoned the deal.
If the deal is reached, it will mark the end of Lazard's 175-year history as an independent financial institution. Lazard has weathered two world wars, global economic turbulence, and various complex situations.
Since the end of the negotiations, Lazard has begun a succession process, with Jacobs, who has led the company since 2009, becoming executive chairman. Economist and former US government official Peter Orszag will take over as CEO in October.
In April of this year, Lazard announced that it had cut about 10% of its workforce due to sluggish trading activity and high recruitment costs during the pandemic. In a separate division, Lazard manages about $200 billion in assets. Since the beginning of this year, Lazard's stock price has fallen nearly 7%, and its market value has dropped to $3.7 billion.
Meanwhile, ADQ has been increasing its trading efforts in the UAE and overseas over the past two years, while hiring more bankers. In recent years, as Abu Dhabi has accelerated its economic diversification plan, its ambition to enter the financial services sector has become increasingly evident.
Earlier this year, it was reported that the largest bank in the Middle East, First Abu Dhabi Bank, was considering a bid to acquire STANCHART, but the bank later clarified that it had abandoned the move. First Abu Dhabi Bank said: "We confirm that we were in the preliminary stages of evaluating a potential bid for STANCHART, but we are no longer considering it."
ADQ has also partnered with US private equity firm General Atlantic in an attempt to create the region's largest alternative investment management company, managing private equity, venture capital, and credit funds for ADQ, IHC, and another Abu Dhabi fund.
