DealZone

A day after the body of a prominent Emerati sheikh killed in a glider crash was found in Morocco, speculation is swirling around who will be tapped to take over his job as chief of one of the world’s largest sovereign wealth funds.

Sheikh Ahmed bin Zayed al-Nahayan ran the Abu Dhabi Investment Authority (ADIA), a fund reported to have assets of between $500 billion and $700 billion. He was ranked by Forbes magazine as the 27th most powerful person in the world in 2009.

He was also the younger brother of Abu Dhabi ruler and United Arab Emirates President Sheikh Khalifa bin Zayed Al Nahyan, the man leading the charge to find a successor to head ADIA.

Created in 1976 to manage Abu Dhabi’s bountiful oil proceeds, ADIA has assets ranging from stakes in Citigroup to Britain’s Gatwick airport.

Here are some stories from around the Web on who may soon be in charge of managing those assets:

They may be placing smaller bets, but sovereign wealth funds were back with a vengeance in the third quarter.

Global corporate mergers and acquisitions activity involving sovereign wealth funds jumped sixfold to nearly $22 billion in the quarter, with 37 deals completed. Global announced M&A volumes involving state investment vehicles stood at $21.8 billion, up from $3.6 billion in the second quarter, according to our data.

The number of deals more than doubled from 17 in the April-June period. Only two weeks into the fourth quarter, there were five pending or completed deals with a combined value of $164.7 million. At the height of the boom in the first quarter of 2006, sovereign wealth funds sealed 35 deals worth $45.7 billion.

Remember the sovereign wealth funds? These were the state-run pools of funds that lost their shirts trying to bail out big Western financial companies last year. After dumping $80 billion into the sector, our data shows they are wearing shirts again, but are keeping clear of the industry that that made markets in toxic assets. Global corporate M&A activity involving the funds recovered to $3.61 billion in the second quarter. That’s a far cry from the end of last year – about a fifth of the total then – but a big jump from the last quarter.

In the first three months of this year, sovereign wealth funds’ merger volumes sank to just $1 billion from $19 billion in the final quarter of 2008, and had once been as high as $45.4 billion set in the first three months of 2006.

“Many funds have shifted focus away from aggressive investment abroad and instead put money into assets at home or into “strategic” foreign assets, such as food and energy, that fit in with national economic policy,” reports Natsuko Waki.

Opportunistic buyers, lovingly dubbed “tourists” by those in the industry, have moved into the secondary private equity market. They’re looking for positions in brand-name private equity funds at knock-down prices. As I wrote in a DealTalk today:”Pension funds and wealthy middle-east sovereign wealth funds are buying up investments in private equity funds, pushing up prices and sidelining secondary firms that specialise in acquiring the assets.”The market for second-hand private equity assets — where private equity investors offload assets to specialist buyers — has mushroomed as the credit crisis has intensified. And increasing numbers of cash-strapped investors are concerned about meeting their future commitments to buyout funds.”New investors have been attracted to deals by steep discounts to net asset value, forcing up prices for specialist buyers, such as Goldman Sachs (GS.N) and HarbourVest Partners (HVPE.AS) that last month closed secondary funds after reaching their $5.5 billion and $2.9 billion targets respectively.”Read the full piece here.