Abu Dhabi Awqaf launches investment arm to optimise endowments

The capital’s Endowments & Minors Fund Authority or Awqaf Abu Dhabi has launched a specialised investment company — Awqaf Capital — to leverage revenues and usage of endowments, aiming to expand the sector to include health, educational and social projects.

Announced at Abu Dhabi Finance Week (ADFW) on Thursday, the company will start operations in the first quarter of 2025.

“It will serve as the investment arm of Awqaf Abu Dhabi to manage endowments — cash and assets — and carry out investments in both the UAE and abroad to make them more profitable and sustainable for beneficiaries,” said Fahad Al Qassim, Director General of Awqaf Abu Dhabi.

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Since it came into effect in May last year, Awqaf Abu Dhabi has been managing the emirate’s endowed assets and monetary funds that used to be under the federal General Authority of Islamic Affairs and Endowments.

Such endowments are not always handled with substantial governance and expertise, he said, undermining potential revenue and influence. In the case of endowed property, it should be handled by experts who can evaluate its market value based on its age, earned profit, as well as ‘optimise high and best use’.

“Today this doesn’t exist,” said Fahad Al Qassim.

“There was a case of waqf villas that were rented for 200,000 but they are worth much more; we rented them yesterday for 800,000. The value is not times one, it is times four.”

Abu Dhabi Awqaf focuses on expanding the scope of endowments beyond the traditional understanding which limits it to basic Islamic projects like building mosques, wells and charitable centres.

“Endowments include far more than that,” said Al Qassim.

Most of the endowments adopted from the federal authority revolve around religious initiatives due to a limited understanding of what endowments could entail.

“Our role today is to clarify the definition of endowments in the community, it doesn’t necessarily have to be a religious initiative, it could be any charitable project that benefits society, health and academia.”

He cited a Dh1-bn healthcare investment fund launched by his authority in May. It aims to optimise revenues from operating in the market as well as beneficiaries over the course of five years.

“The profits of the one billion will be deposited in healthcare projects – from treating patients to building hospitals if needed.”

While Awqaf Abu Dhabi is already investing in registered endowments, the goal is to have an investment fund managed by a specialised company, Awqaf Capital, under its umbrella.

“We should be cautious when dealing with endowed money, especially for minors, to ensure that it will continue to be resourceful even during financial crises,” said Al Qassim.

“We have very rapid economic cycles in the world today, and who knows, we could face another economic crisis in 10 years, so it is important to invest in defensive sectors that will always exist regardless of the economic situation.”

Such sectors include education, health, food and infrastructure because “people cannot live without them.”