As Abu Dhabi Investment Authority (ADIA) celebrated its 40th
anniversary last year, the world’s second largest
sovereign wealth fund also bade farewell to one of its most
loyal servants when Sudha Datta decided to hang up his
An accountant by trade, Datta first joined ADIA in 1981
after a short spell working as a consultant for Price
Waterhouse, now PwC. For the next decade he carried out
investment portfolio accounting, valued assets and prepared
statements as the UAE sovereign grew in size.
A spell in Toronto in the early nineties followed, during
which Datta built up a successful tax and advisory
practice for small businesses before going on to balance the
books for Purolator Courier then the largest distribution
company in Canada.
ADIA lured Datta back in 1996 and there he remained for the
next twenty years, eventually becoming head of operations. In
practice, Datta’s role at the fund saw him forge
close ties with custodians, lending agents, brokers, fund
managers, tax and legal advisors globally.
Across securities services, he became the
fund’s key decision maker and much of his time was
spent conducting due diligence visits, selecting providers and
negotiating legal and service level agreements. Ultimately
though, he had to convince individuals further up the chain -
ADIA’s Investment Committee – to follow
"It wasn’t always easy," he told Global
Investor/ISF. "AIDA was and indeed remains a highly
conservative long-term player. Securities lending, for example,
was talked about from the moment I joined but took years to get
off the ground."
In 1999, three years into Datta’s second stint
at the sovereign, ADIA decided to create a dedicated operations
department. Fortunately for Datta, an individual with an
investment background became executive director of the
department and moved into the unit to accompany him. The pair
then raised the topic of securities lending again.
"Eventually we began to lend fixed income securities before
moving to equities" he explained. "It was a long, gradual
journey. All of our lending was conducted through agents,
never on a principle basis. That remains true today."
Ultimately the balance sheet strength of the agent banks was
crucial to ADIA’s Investment Committee engaging in
the idea of stock loan in the first place. Primarily,
Datta’s selection process involved a financial
assessment of the bidders before he even considered a closer
inspection of how each agent ran their lending desk. Once a
decision was made, he gave complete independence to lending
agents as long as they stuck to guidelines.
For the next eight years the sovereign continued its
securities lending program earning substantial income in the
process. Datta and his team focused on bench marking
performance and carefully monitoring risk. The fund celebrated
its most profitable year from stock loan in 2007, before the
financial crisis ensued and lending came to a halt.
"Securities lending operations ceased for a couple of
years," Datta recalls. "However, we never lost a dime from
securities lending during the crisis. It turned out to be a
proud moment in my career. Looking back though, I
can’t thank ADIA’s investment